There are a lot of figures connected with the transit process.

In this case, one of the most important indicators is transit time.

Let’s find out what this figure is needed for and how we can use it for profitable international trade.

What is the total transit time?

If the delivery is processed by several carriers, the total transit time will be the time needed for the transportation of goods between carriers and to the final destination.

How do time zones affect transit time?

Unfortunately, there is no generally accepted practice for correlating the transit time with time zones.

The transit time is measured as a separate value, which can make the understanding of delivery deadlines quite confusing.

Please, discuss with your supplier/forwarder about the time zone being used in your relations.

What is the difference between lead time and transit time?

The lead time in a supply chain management context is the time from the moment the customer places an order (the moment the supplier learns of the requirement) to the actual delivery.

There is also a connected concept of cycle time: it begins when the actual work on the unit starts and ends when it is ready for shipment.

What is the common transit convention?

Community transit is a European Union (EU) customs procedure.

It allows foreign products to move from one point of the EU to another.

Also, this procedure is used for domestic transit inside the EU countries.

The Common Transit Convention is the document which implies such procedures.

If you are a resident of the European Union, please, keep in mind that this process can affect the delivery time.

What is a transit time in shipping?

There are two main definitions of transit time (TT).

First of them states that it is the time needed for the cargo to get from the supplier to the buyer.

However, we prefer to stick with another concept: the transit time is the approximate time needed for goods to travel from one point to another.

If we are talking about sea freight, then the transit time will count when the goods are on the way from the port

A to port B.

In the case of air freight, we are talking about the airports instead of seaports.

The transit time may change due to the unforeseen circumstances which will be discussed later in this FAQ.

Transit time and delivery time: how are these two differ?

The delivery time is a wider concept than transit time.

The delivery time covers the whole process of shipping from the supplier to the buyer, including customs clearance, package handling, etc.

The transit time, on the other hand, refers to the transportation process by sea/air/rail freight.

Which factors can affect transit time?

There are several key factors which can affect the transit time.

Transportation mode.

The most obvious on this list, the transportation mode is the main difference between each shipment.

Airfreight, basically, is the fastest way of goods delivery, but it is not the mode which you can freely use for bulk cargo.

Sea vessel, on the other hand, is the slowest one, but the cheapest, and also can cope with massive orders.

Partner carriers.

In international trade, one shipment is usually processed by several carriers.

The communication between them can easily affect the transit time.

Weather.

Weather is a huge factor for all kinds of transportation modes.

According to statistics, it is an issue in the 90% of delivery delay cases.

The most affected mode is road transport, especially in the snow season.

Road construction and traffic (for road freight only).

Like the weather, road and traffic issues can’t be precisely predicted or calculated.

Forwarding agents and drivers do their best to stay tuned with the situation on routes, but it is never enough to fully guarantee the lack of delays.

Among other factors affecting the transit time, sea and airport congestions can be named.

What is a mileage guideline in the case of transit time?

Some shipping companies create a mileage guideline, which shows the approximate transit time for a different distance.

The mileage guideline is mostly used in the case of road or rail freight.

You can see the example of it in the next question of our FAQ, “What is the approximate transit time for road/rail freight?”.

Who is responsible for a transit time delay?

As we’ve already figured out, there are a huge amount of factors affecting the transit time.

You may assume, that such things as delays can happen a lot.

So there is a huge need in assigning the liability for it.

In general, the shipping line is the party responsible for the transit time delay.

However, the freight forwarding agent also can be obliged to meet the transit time deadline if it is stated in the trading agreement with the buyer.

How the transit time and freight costs are connected?

It is obvious that the fastest transportation option will be the most expensive.

If you are choosing the air freight, you’ll get the goods in one week on average.

However, in this case, the costs double compare with the sea, road or rail freight.

What is the meaning of “in transit” status?

The vast majority of shipping companies uses tracking programs to show their clients the movement of their packages.

Your order can have a lot of statuses, including “in transit” status.

It means that your freight is on its way to be delivered and the transit time is already counting.

After the transit is over, you may see the status “delivered”, “processing customs clearance”, or something similar.

Can the customs clearance affect transit time?

If you head back to the first question of our FAQ, you can see that there are two widespread definitions of transit time.

So if you consider the transit time as a process of goods transfer from the supplier to the buyer, then the customs clearance will be among the factors affecting such time.

However, the transportation process from one port to another obviously can’t be interrupted by customs.

What is the approximate transit time for road/rail freight?

The minimal speed of freight train is form 10 to 30 miles per hour.

Under usual circumstances, the maximum authorized speed on the vast majority of rail routes is about 60 miles per hour.

Speaking of the road freight, the difference lies in the loading options.

Full truckload transit times are the next on average:

• 0 to 399 miles: same or next day delivery;
• 400 to 600 miles: next day delivery;
• 601 to 1200 miles: delivery within 2 days;
• 1201 to 1800 miles: 3-day service;
• 1801 to 2400 miles: delivery in 4 days;
• 2401 to 3000 miles: 5-day delivery;
• 3001 to 3300 miles: 5-6 day service.

Less than truckload mileage guideline is the next:

• 50 to 400 miles: 1 to 2 days;
• 401 to 600 miles: delivery within 2 days;
• 601 to 900 miles: 2 to 3 days;
• 901 to 1200 miles: 3-days delivery;
• 1201 to 1500 miles: 3 to 4 days
• 1501 to 1800 miles: 4 days for transit;
• 1801 to 2100 miles: 4 to 5 days needed;
• 2101 to 2400 miles: 5-days transit;
• 2401 to 2700 miles: 5 to 6 days;
• 2701 to 3000 miles: delivery within 6 days;
• 3001 to 3300 miles: 6 to 7 days needed.

Please, keep in mind that the above-mentioned figures are approximate and the real mileage guideline differs for each shipping company.

If you wish to know more about the road freight, please check this useful Tj chinafreight guide.

How can I calculate a transit time of the freight?

Freight forwarding companies and shipping agents use different software to calculate the transit time of each freight.

The vast majority of logistic apps are distributed for money, however, you can find a lot of free web calculators on the Internet.

Also, you can try to count the transit time manually, figuring out the average speed of transport and the distance of delivery.

Can transit time be guaranteed in shipping?

The transit time is the approximate value which can’t be 100% guaranteed in shipping.

What is the average transit time for air freight?

The air freight is considered as the fastest mode of transportation.

The average delivery time for air cargo shipments is between six to seven days: the transit process covers only 1-2 days from it, while the other time is needed for export/import haulage and customs clearance.

What is the average transit time for sea freight?

On average, sea freight is the slowest type of transport.

Depending on ports and shipping line capacities, it may take from 13 to 40 days.

As an example, let’s see the approximate transit time of shipping from Guangzhou, China to the USA:

• New York: 27-33 days;
• Miami: 34-40 days;
• Los Angeles: 13-18 days;
• Seattle: 16-21 days.

The sea freight from China to the UK takes nearly the same time:

• from Guangzhou/Shenzhen: 23-25 days;
• from Central China (Shanghai/Ningbo): 28-30 days;
• Northern China (Qingdao/Tianjin/Xingang): 32-35 days.

Note: the whole delivery time will be larger because of customs clearance and haulage procedures.

How can the transit time be improved?

In recent years, the transit time has been slightly improved due to the ongoing development of transportation technologies.

Modern shipping companies can improve the transit time just by using the fastest machines trucks, trains, and aircraft.

Also, the transit time can be improved by choosing the fastest and safest routes possible.

What is the Importance of Documentation on Transit Time?

Shipping documents are essential in any shipping venture.

They help to hasten the shipping process, ease tracking and enable easy identification of goods.

That said, several documents are needed both at the loading and offloading port.

Even though transit time has nothing to do with documentation, you should provide the needed documents at the right time.

Documents such as those showing the delivery address and the consignee make it easy to schedule delivery and reduce transit time.

Suppose in a case where your supplier delivers the goods to the port and provides inaccurate details on the delivery point.

In such a case, your goods cannot leave the port because there is no exact transportation point.

Also, when you fail to present the right documentation at the receiving port, customs may not be able to release your goods.

In worst cases, they may even deny the entry of your goods into the country.

You need your goods at the earliest possible time.

Therefore, you should do your part by providing detailed documents at the earliest possible time and let the shipping company do their part.

What is Door to Door Transit Time?

Depending on the context of shipping, you can use transit time to refer to:

• The time it takes to deliver the goods to the port
• The time it takes to ship goods from one port to the other
• The time it takes to deliver goods from the port to your doorstep.

If you are shipping under EXW incoterm, you are responsible for your transportation.

In this case, the transit time will depend on your method of transport.

Usually, express shipping offers the quickest delivery at a shorter transit time.

What is the Difference Between Transit Time and Free Time?

As previously mentioned, transit time refers to the total number of days your shipment takes after booking for shipment until it is delivered to the agreed place.

Transit times are specific to the shipping time and do not include the port’s inland delivery time.

On the other hand, free time is the grace period provided by the liner.

It is when you have to complete local importation, offload the cargo, and return the empty shipping container.

Does transit Time Affect the Cost of Shipping?

Generally, the shipping cost is relative to the destination port and is charged on the distance and not the times.

When shipping from china, the shipping cost will depend on the container weight, volume, and shipping distance.

Therefore, your distance dictates your shipping time and is thus used to calculate the cost of shipping and not the transit time.

How does the Type of Shipment Affect Transit Time?

The type of goods you are importing will dictate the method of shipment you use.

In most cases, when you import large quantities of products, you will settle to either use sea or air transport.

Sea transport is cheap when you are importing large quantities. However, it takes a slightly longer transit time.

Air transport offers a shorter transit time and is limited to the type of goods you can transport.

Some heavy and irregular products cannot fit large commercial airlines, meaning you can only use sea transport.

Also, perishable products need a shorter transit time meaning that they require air transport.

When it comes to shipping certain kinds of goods, you should check with your country on rules and regulations to be followed.

The government can hold hazardous goods, and preparing and clearing for export may increase the transit time.

What is Transshipment, and How does it Affect Transit Time?

You might sometimes find that your consignment leaves a specific port in international shipping but does not reach your destination port directly.

Along the way, your shipments are loaded onto another vessel that delivers them to your port.

Transshipment occurs when there is no direct vessel to your destination port. It saves on costs but at the same time leads to an increase in transit time.

When your products are being shipped under transshipment, you risk waiting to receive the goods for long. The process of offloading a vessel takes a lot of time.

If your products have to be offloaded from one ship, sorted, and loaded onto another vessel, it will take longer to receive them.

Transshipping is not a perfect shipping method since it inconveniences your plans because of the longer transit time.

Nonetheless, you can use it only if you lack a direct shipping route and plan on saving shipping costs.

Does Shipping Seasons Affect Transit time?

Yes.

Seasons tend to have a very significant influence on the demand and supply of products.

There are opportune times when shipping is cheap and the transit timeless.

The shipping seasons are grouped into four seasons, each with varying impacts on costs and transit time.

January-March Season

This season is also referred to as the quiet season.

During this season, many customers are recovering from the busy holiday season.

The climatic temperatures are also low due to the snow, and highways are not suitable for transportations.

The demand for products is low, and few customers place their orders for shipment.

During this time, many vessels are lying idle the shipping costs are low.

Placing an order during this season is opportune, and you are guaranteed less transit time for overseas shipping.

April-July Season

As the year progresses, the production volume increases, and the stock in most warehouses significantly reduces.

The shipping industry is starting to pick up, with most shipping companies settling in the production industries.

At such a time, the demand for carriers increases, leading to a surge in shipping costs. Many customers become despair to have their goods delivered to them.

Finding a carrier is difficult during this season, and in most cases, you will pay hugely for shipping.

The transit time also lengthens as finding a shipping space and processing export/import clearance becomes a problem.

August-October Season

This is a busy period for every party in the shipping business.

It is school season, and parents place enormous orders for their children, and most carriers are occupied.

Also, prospective customers are placing huge orders for the holidays.

Companies are also moving their products from one warehouse to the other due to the high sales. ‘

Finding a carrier at this time is practically difficult.

The costs are high, and it takes more time to prepare and load goods for shipping.

However, during such a time, many carriers endeavor to make maximum returns, and thus the transit time will be less.

November- December Season

This is the last season, and ironically, it is busy as well.

Toward the beginning of November, many customers make rush shopping, and finding a carrier becomes difficult.

However, things begin to slow as people near Thanksgiving, Christmas, and New year.

Also, many carriers are in a rush to finish delivery before the end of the year.

If you successfully secure a carrier, everything moves swiftly, and the transit time shortens even though the costs are high.

What areFCL and LCL and their Effect on Transit Times?

When it comes to international shipping, you can choose to have your goods in a Full Container Load (FCL) or Less than Container Load (LCL).

Both serve the same purpose of having your goods shipped to your destination.

However, depending on your goods’ quantity and type, you need to understand what each term means and how it impacts the transit time.

Full Container Load (FCL)

One rule set by the carriers is that all goods must be inside a container during shipping.

FCL shipment refers toa large product or many products that can fit in a single container.

Basically, under FCL, you will hire a container and have your goods shipped in them.

When the goods reach the destination port, arrange for the goods to reach you in the same container, remove the contents and return the container.

FCL is expensive because you hire the container and have the guarantee of safe handling of your products.

However, it is convenient because of the shorter transit times.

Less than Container Load (LCL)

LCL is the most common shipping method used by the majority of small importers.

It is convenient for customers with small orders and small budgets.

It involves a single container carrying products of several customers to the same destination.

Under LCL, the customers each have to pay the container fee.

The different pieces of cargo have to be picked from various places before being shipped.

The LCL shipment takes a longer transit time and is inconvenient when the delivery time is essential.

What is Cut Off Time, and How does it Affect Transit Time?

Cut off time is the deadline allocated by the carrier in which all products scheduled for shipment have to be availed at the harbor.

It considerably impacts the scheduling of shipment.

Also, it dictates the loading of the vessel and consequently the departure time.

It would help if you organized inbound logistics to have your products delivered at the loading port.

Failure to do so in time will delay your transit time, and in most cases, you will have to wait even up to a week.

What is the Relationship Between Transit Time and Schedule Reliability?

Schedule reliability refers to how frequently carriers achieve their goal of having shipments delivered to their customers.

On the other hand, Transit time is how much time it takes to deliver goods from one port to another.

Therefore, transit time is one single measure used to ascertain the schedule reliability of a particular carrier.

Does the Choice of Incoterm Affect the Transit Time?

Yes, partly.

Incoterms are rules that outline the agreement between a seller and a buyer.

They describe the responsibility between each party.

Transit time entirely depends on the carrier’s efficiency and schedule.

However, under certain incoterms where the seller pays for shipping (CIF, DDP, DAP, CIP, and CPT), the seller can choose a shipper whose shipping cost is low but takes a longer Transit time.

In essence, your choice of incoterm may how and when you finally receive your goods at the destination.

Has Covid 19 Affected Transit Times in International Shipping?

Covid 19 has had a significant impact on most suppliers, shippers, carriers, and freight forwarders’ delivery schedules.

Ports have had to close in adherence to quarantine measures.

Goods that were previously carried comfortably on ships and cargo crafts now have to follow a set of strict rules and procedures.

This has led to a significant delay in shipments as it takes a long time now to get the necessary permits and approvals or international shipping.

Does ICC Cover a Claim that Leads to an Increase in Transit time due to Covid-19?

The shipping industry has been dramatically impacted by covid-19, leading to delays in loading containers and yard congestions.

The delivery times have also been significantly affected given the high dependency on paper-based documentation and many banks not operating at full potential.

Institute Cargo Clauses (ICC) provides three clauses (A, B & C) that governs marine operations.

• ICC A provides the most comprehensive marine insurance at a higher premium
• ICC B less restrictive with a moderate premium
• ICC C very restrictive but with a lower premium

According to clause A that covers significant risks associated with shipping, the claims should be on actual risks that are assured.

Covid-19 caught everyone by surprise, and no shipper knew how long it would take.

This means that few importers, if not any, insured their shipment against delays resulting from covid-19.

Clause A also offers 60 days protection policy to the customer.

You should receive your goods within 60 days of delivering your goods at the loading Wharf.

The clause refers to when the goods are still under the care of the shipper.

However, the delay caused by Covid-19 finds when the goods are already at the port of destination.

Thus, there would be no claim regarding the policy on the Transit time increase caused by Covid-19.

What is Slow Steaming, and how Does it Affect Transit Time

Slow steaming is a typical marine term that refers to operating cargo ships at speeds below the maximum speed.

Slow steaming arises when the cargo ship needs to lower fuel consumption, reduce emissions, and maintain the vessel, which eventually leads to a lot of money-saving.

However, slow steaming leads to an increase in transit time and delays in delivering the consignments.

Can your Carrier Choice Help to Speed up Transit Times?

Yes.

We have mentioned the importance and convenience that results from a shorter transit time.

The hope of reducing the transit time rests on choosing a trusted shipper.

Your shipper should be well versed in the shipping industry and able to communicate at the appropriate time.

Also, a good shipper should have access to both air, train, land, and sea transport to enable you to make the right choice depending on your interests and priorities.

Besides, the routes used by your shipping company should be convenient, safe, and short to reduce your transit time.

Your shipping company will provide you with approximate transit time if you choose different modes of transport.

What Influence do Freight Forwarders have on Transit Time?

The whole shipping process is complex and requires the work of an expert.

Freight forwarders offer their vast experience in scheduling shipping and handling any clearances.

With their experience, freight forwarders can have an immense impact in linking with carriers who have a reputation and help shorten transit time.

The freight forwarders also help handle clearances that might slow the shipping process.

In doing so, they help in having your goods loaded and offloaded on time for delivery.

What is Rolled Shipment, and How does it Affect Transit Time?

Depending on the demand for shipping, carriers might increase their costs and push forward other cargo shipments.

When some valid documents are needed, carriers might push forward your consignments until you provide the required documents.

This is not accepted, especially after paying for the consignment to be shipped.

If you understand Transit time as the whole process from delivering goods to the port until they reach you, then rolled shipment dramatically impacts your Transit time.

It takes days for a particular carrier to load and arrange shipment to a single destination.

Therefore, once the original vessel has left, you will have to wait even for a week before the next vessel is scheduled.

How does the Number of Ports Between Origin and Destination Affect the Transit Time?

The higher the number of ports between the origin and the terminus, the higher the transit time.

If your carrier has many stops along the way, the chances of delays are higher.

These delays are caused by missing paperwork, congestion of the ports, time is taken to load and offload, and other unavoidable factors.

You should carefully research which route your shipment will take and the ports’ nature in those routes to avoid increased transit time.

You need your goods at the right time; therefore, choosing another carrier with a different route can allow you to plan with a shorter guaranteed transit time.

CNF shipping Incoterms are a set of rules which describes the delivery of goods from the supplier to buyer.

CNF rules are used to describe the responsibilities of parties connected with customs clearance, freight shipping, and final delivery.

Read this FAQ if you want to learn more about all the nuances about the CNF Incoterms.

What are the Buyers’ responsibilities in CNF shipping terms?

Under the CNF agreement, buyer’s responsibilities arise from the time when goods arrive at the port of destination.

So, the buyer is responsible to pay any costs at the moment of arrival.

This might include the next charges:

• customs clearance fee;
• import duty;
• port charges;
• VAT (value-added tax);
• fuel surcharge;
• docking charge;
• warehouse storage fee.

Please remember, that the risk of loss or damage to the products passes to the buyer after placing them on board at the port of shipment.

What is the difference between FOB and CNF Incoterms?

FOB (Free on Board) rules state that the seller completes the delivery when the goods get to the ship at the nearest port.

After this, the buyer has to organize the transit to the destination country and pay all fees and costs connected with this process.

In the case of CNF Incoterms, the seller has to organize and pay for the delivery to the port of final destination.

What is the difference between EXW and CNF Incoterms?

What is the difference between CIF and CNF Incoterms?

CIF Incoterms are similar to CNF, with the main difference lies in the insurance obligations.

Under the rules of CNF, the buyer has to buy additional insurance if he wants such an option to be in charge.

The CIF Incoterms oblige the seller to buy insurance for the transported goods.

Note: all Incoterms with insurance responsibility state that the seller has to provide the minimum coverage.

If the buyer wants stronger insurance, he has to buy it himself or discuss this option with the seller.

What does it mean for CNF Shanghai, CNF Guangzhou, CNF Ningbo, etc?

You can often see such collocations, where the first word is a type of Incoterms, while the second is the name of some city.

For example, you see CNF Shanghai in your agreement with the supplier.

It means that the seller completes the delivery when the goods are placed in some ship at the port of Shanghai and then transferred to your country.

As a buyer, which costs and fees do I have to pay for the CNF Incoterms contract?

As it was said earlier in this FAQ, the buyer has to pay charges which arise at the port of destination.

When the products arrive, you as a buyer have to organize customs clearance and delivery to your office or warehouse.

You can see the full list of possible fees in the question “What are the Buyers’ responsibilities in CNF shipping terms?”.

How do I calculate the CNF price in exports?

Unfortunately, there is no stable formula to calculate prices in export.

The prices might vary because of different sellers, shipping agencies, forwarders, and their quotes.

As a buyer, you have to keep in mind that initial CNF price would be smaller than the final price because of additional customs and delivery charges in your home country.

Can I add qualifications or variations to the CNF Incoterms rules?

Yes, it is possible to add extra words to any kind of Incoterms rule.

For example, you can add the “stowed” rule to the agreement, which will make the seller responsible not only for loading the cargo on board but also for stowing it correctly.

Also, you can add the rule of VAT payment and decide that the seller is responsible for paying not only the export costs and duties but VAT as well.

Note: as a buyer, you have to be 100% exact and correct with terms used in your agreement with the supplier.

Use only clear widespread definitions which are common in international trade.

Should I use CNF as a buyer? What benefits can I get?

Each type of Incoterms has clear advantages and disadvantages for the buyer.

CNF is often the cheapest and helpful Incoterms contract since the buyer is obliged to perform only import procedures.

How the CNF Incoterms impact the shipping costs?

Under the CNF rules, all the shipping costs to the destination country are on the seller.

What are the rules for CNF Incoterms insurance?

CNF Incoterms do not have any kind of rules for insurance.

You can add such clauses directly or use another set of rules, like CIF (cost, insurance, and freight).

Are the CNF Incoterms rules applicable to the eCommerce business?

Yes, a lot of eCommerce platforms use CNF Incoterms, as well as other international trading rules.

The most popular Incoterms for B2B trade are EXW, CPT, or CIF.

The B2C model widely uses CPT or CIF Incoterms.

Reminder: eCommerce platforms are websites which buy or sell products via the Internet or other electronic services.

The most popular eCommerce platforms are:

1. Amazon (both B2B and B2C).
2. Alibaba (B2B).
3. AliExpress (B2C).
4. Shopify (depends on the store, both B2B and B2C).
5. Magento (B2B and B2C).

Does CNF relate to all transportation modes?

No, CNF Incoterms can be used only in the case of maritime transportation.

What is the special paperwork for the CNF Incoterms? Who is obliged to perform it?

Seller is obliged to perform paperwork connected with:

• export customs clearance;
• pre-freight delivery;
• shipping line services.

Buyer, on the other hand, has to be able to:

• complete documents for import customs;
• provide papers for the VAT and other taxes;
• handle any other permits, quotas, special documentation relating to the shipment.

Are there some lacks when using the CNF Incoterms in international trade?

The most obvious flaw of CNF Incoterms lies in the absence of insurance.

Secondly, the transfer of risks connected with loss or damage to goods is also quite confusing: the seller selects the shipping line and organizes the delivery, but he passes his responsibilities when the products are placed on board.

The final lack of these Incoterms arises when the products arrive in your country: from this moment you have to deal with customs and final delivery.

You can prefer to put this work on the forwarding company, but it is connected with extra charges.

Who is responsible for customs clearance in the CNF Incoterms contract?

Export customs clearance is the seller’s obligation, while the buyer has to perform customs duties at the port of destination.

What does the shipping point mean in the CNF Incoterms?

Shipping point is a place where the seller transfer goods to the shipping company.

For example, it can be a delivery truck, post office, loading dock, etc.

In the case of CNF Incoterms, the shipping point is the port in the country of origin.

This is the place where the seller transfers goods to the shipping company, as well as his responsibilities for loss or damage to such goods.

Can I use CNF Incoterms for domestic transactions?

Even though Incoterms were introduced as rules for international trade, they can be used for domestic agreements as well.

However, please keep in mind that CNF Incoterms regulate only maritime freight.

What is the legal status of CNF Incoterms?

Incoterms is a document which is recommendatory in nature.

This is the reason why all international commercial terms have to be backed up with laws.

The parties can choose between three options:

To keep the law of the exporting country

By default, the seller will use laws of his own country when some issues with shipping arise.

Speaking of Chinese laws and regulations, they similarly protect both buyer and seller.

To keep the law of the importing country

If you don’t want to get confused by unclear regulations of a foreign country, you can decide to use domestic laws.

To keep the law of a third country

This option is also popular because it allows finding the consensus between parties.

If the seller doesn’t want to use your domestic laws, you can decide to pick laws of any country in this world.

Note: as a buyer, you have to find agreement about the laws before the shipping process begins.

Otherwise, it will be considered that you are using the seller’s domestic laws.

What is a step-by-step procedure of goods delivery in the case of CNF Incoterms?

Now, when we’ve figured out all the details about the CNF Incoterms, let’s imagine the real situation to have the full picture.

For example, you order some kind of goods from China and decide to use CNF rules with your supplier.

Step 1. The seller packs products, prepare export documentation and other legal papers needed at the port of origin.

Step 2. The supplier delivers your products to the port, using his vehicle capacity or some courier services.

Step 3. The seller has to clear the goods at customs. For this step, the vast majority of companies use the help of customs broker agents.

Step 4. The supplier puts the goods on board the ship. He also pays for the shipping to the destination country and all the above-mentioned services.

Step 5. When the freight gets to the port in your country, you have to start acting.

You must process the customs clearance, pay connected charges and port fees.

Step 6. Finally, you have to deliver goods from the port to the needed destination point.

What is CNF Incoterms connection with the transfer of title to the goods?

Please remember, that none of Incoterms determine transfer title to the products or ownership fact.

Also, they do not contain info about the payment for goods.

Who pays CNF Freight?

Under CNF, the seller nominates the carrier.

Hence, they are responsible for paying for all the costs associated with transporting the goods from their location to the destination port.

This includes inland trucking costs at the country of origin and ocean freight costs from origin to the destination port.

Once at the destination port, the buyer arranges transportation of the goods to their final destination.

Does the CNF Price include Duty?

No, CNF does not include duty. It only covers the cost of goods and freight charges from origin to the point of delivery.

The buyer’s responsibility is to pay for import duty and taxes andany other costs related to customs clearance.

Does CNF include Unloading?

No, it doesn’t.

With CNF shipping terms, the seller is responsible for transporting the goods from origin to the destination port.

The seller’s responsibility includes trucking goods from the factory or warehouse to the shipping port.

They also load the goods onto the shipping vessel and facilitate shipping to the destination port.

Once the shipment leaves the shipping dock, the seller ceases to be responsible for it.

Final delivery rests with the buyer.

As the buyer, you will have to organize unloading from the shipping vessel, import clearance, and trucking to the final destination.

Can you use CNF for Air Freight?

No, you cannot use CNF for Airfreight.

This incoterm only relates to shipments you’re transporting by sea or inland waterways.

If you’d like to ship goods via airfreight, you may need to consider other incoterms.

Does CNF work with Letters of Credit?

Yes, it does; although, it comes with a fair amount of risk to the seller.

If a seller agrees to payment by letter of credit, they will have to wait until the buyer acknowledges receipt of goods to get paid.

Or provide evidence showing that goods have been dispatched and all carriage fees are paid for.

Technically, letters of credit are separate transactions from the sales contract.

In other words, banks are very less concerned with such agreements even if they’re referenced in the LC.

Likewise, banks are not bound by the trade contract when it comes to LCs.

This can create a big problem for sellers that invest a lot of their resources in negotiating contracts.

Especially those who specify payments be made via LC.

Letters of credit don’t protect nor benefit the seller as they are drawn after the trade contract.

Also, sellers don’t negotiate the critical terms of the LCs.

Since most LCs presented to banks tend to be discrepant, this can delay payment or potentially eliminate the LC payment.

You (the seller) should focus on preparing and submitting the relevant documents to the advising bank.

The paperwork should comply with the terms of the contract.

For the buyer, agreeing to pay via LC protects you against fraud and possible scams.

This is because the seller can only be paid once they fulfill all their delivery obligations under the CNF terms.

Which other Incoterms can you use as an Alternative to CNF?

CIF, FOB, and FAS are the most common alternatives of CNF in foreign trade contracts.

FAS (free alongside ship) means that the seller is only responsible for delivering the goods to the port next to the shipping vessel.

It also requires the seller to load the goods onto the ship. After this, risk and responsibly shifts to the buyer.

Like FAS, FOB (free on board) also requires the seller to deliver the goods to the origin port and load them for shipping.

For buyers, this incoterm is cheaper and offers full control over the delivery process.

CIF, on the other hand, is no different from CNF.

Both terms are used during sea shipping and require the seller to facilitate the transportation of goods up to the destination port.

However, CIF obligates the sellers to take up liability of goods up to the point of delivery while CNF doesn’t.

If you’d like the seller to assume the risk of transporting the goods to the destination, CIF is an excellent option over CNF.

How can you get Goods Insurance when Shipping CNF?

As you know, CNF shipping does not include freight insurance.

Therefore, as the buyer, you’re responsible for insuring the goods from the point of shipping to the destination.

This ensures that your goods reach the destination in good form and that you claim compensation in case of loss or damage.

If you buy goods on CNF terms, you can talk to your forwarding or sourcing agent to organize insurance for you.

These agents are professionals with immense experience and connections in the industry.

They can help you get a policy with reasonable coverage and affordable premiums.

Alternatively, you can consult an experienced insurance broker to help you acquire insurance coverage for your goods.

Just ensure that the broker you’re contracting is reliable and trustworthy.

If you trust yourself, you can personally approach a reputable insurance company and handle the formalities yourself.

No matter the approach you choose to take, ensure that it gets you reasonable cargo insurance cover at good rates.

Are there Hidden Costs with CNF Price?

Well yes.

CNF price only includes the product price and cost of shipping the goods from the supplier’s facility to your destination port.

It excludes any other costs that occur at the point of delivery and beyond.

Meaning, you will have to bear sole financial responsibility for other costs involved at your destination port.

Additional fees associated with CNF shipping include port fees, import duty and taxes, docking fees, warehousing charges, fuel surcharges, etc.

So when considering buying on CNF terms, remember that the price is only just the tip of the iceberg.

It does not mark up the final landed cost of your product from origin to destination.

Can you use CNF for Alibaba Purchases?

Yes, although FOB and CIF are the more default prices on the Alibaba platform.

Sellers and buyers alike can agree to transact on CNF terms where the buyer arranges their insurance.

Both parties need to negotiate the terms and understand them clearly before agreeing to the contract.

Is there any Point where FOB equals CNF in Shipping?

No.

CNF and FOB have very distinct outlines on who is responsible for costs and risks during international shipping.

In FOB, the seller only delivers the goods at the shipping port and loads the goods onto the ship.

CNF requires that the seller oversees the transportation of the goods up to a destined port.

The buyer assumes a large part of the risk and financial obligations in FOB.

In CNF, it is the seller that bears most of the responsibilities.

The only thing that can compare FOB to CNF is that both incoterms are designated for ocean shipments.

Moreover, both terms exclude insurance coverage for the goods.

Who chooses the Freight Forwarder in CNF Shipping?

Since the seller is responsible for 90% of the freight process, they naturally choose the freight forwarding agent to use.

As the buyer, you can also hire a freight forwarder to help you receive and clear goods at the destination port.

The agent can also organize the goods’ transportation from the origin port to your door or warehouse at the destination country.

A good freight forwarding agent will also help you with the customs clearance process.

 When choosing these agents, choose those with a good reputation and experience in the industry.

Can you Pick up a CNF Shipment at the Destination Port Yourself?

Yes, you can pick a CNF shipment yourself once it reaches the delivery point.

It is even better if you can confidently navigate through the customs clearance process by yourself.

Otherwise, delegate the consignee’s role to your shipping agent or customs broker so they can also work on clearing the goods for import.

When should you Use CNF?

For buyers, you should use CNF when you’re relatively new to foreign trade.

It saves you the hassle of dealing with all the processes and formalities of international shipping.

CNF terms are also ideal when importing small volumes.

However, it ismore costly in reality as you may end up paying more in terms of terminal handling charges at the delivery port.

When you have a trusted shipping agent or customs broker at the delivery point, you may consider CNF.

The agent/broker can help you handle the customs clearance formalities and ensure safe delivery from the port to your final destination.

As a seller, a CNF price can significantly increase your profit.

It would help if you considered it for overseas transactions where the buyer is not familiar with the import process.

When you have trusted connections, i.e., freight forwarders and carriers, quoting a CNF price can also be convenient.

Are CNF Terms Legally Binding?

Not really.

CNF shipping incoterm serves as a commercial agreement between buyer and seller in international shipping.

In case of a dispute during the engagement process, the contract can be referenced to establish who is responsible and gain a resolution.

Therefore, both the seller and buyer should review the contract carefully before agreeing to the terms.

However, CNF does not replace any legal systems that exist in various countries and trading blocs.

It only codifies the concept of risk, allocation of costs and liability, and the delivery point.

Is CNF suitable for FCL shipping?

Yes.

Typically, CNF is designated for ocean shipments.

The shipment size does not matter, nor does the type of container you’re shipping the goods in.

CNF can be used for FCL (full container load) shipments and LCL (less than container load) shipments.

With LCL shipments, the seller will handle the consolidation process to ensure the goods reach you at the agreed time and in good form.

What is the equivalent of CNF shipping for Airfreight?

As earlier mentioned, you cannot use CNF for

The parties in international trade can be guided by the rules of Incoterms 2010.

This edition contains 11 sets of international commercial terms for the delivery of goods.

DAP is a new concept introduced in Incoterms 2010.

Let’s find out what the DAP Incoterms are and how they differ from other sets of rules.

What are the DAP shipping terms?

The term DAP is an abbreviation for Delivered at Place.

It literally means the delivery of goods to some place, previously agreed between the buyer and seller.

The only thing important here is that such a place has to be situated outside the supplier’s country.

Who pays for DAP shipping?

Shipping under the DAP Incoterms is an obligation of the seller (consignor).

What are the buyers’ responsibilities in DAP shipping terms?

For the buyer, sending the necessary documents on time is very important.

If you have unforeseen difficulties in obtaining licenses for the import of goods, then all expenses for untimely unloading would fall on you.

Under the DAP delivery, the basic requirements for a buyer are the next:

• pay for customs procedures regarding the import of the product;
• notify the seller about the time of the alleged acceptance of the goods;
• unload the goods on a specific date.

The latter obligation is important to keep in mind.

The supplier is only responsible for the transportation of goods to a certain location, not for unloading.

You, as a buyer, have to unload the products from some kind of transport yourself or with the means of third parties.

What are the seller’s responsibilities in DAP shipping terms?

The seller must transfer to the buyer all accompanying documents for the goods.

These include invoices, and quality certificates, certificates of conformity and other documentation that is indicated in the agreement.

1. Choose a carrier that will deliver the goods and conclude the shipping deal.
2. Pay all customs costs for export.
3. Notify the buyer of the location of the goods at the delivery point.
4. The seller receives export licenses and certificates himself, at his own expense.

Upon the arrival of the goods at the destination, the seller notifies the buyer about this and provides him with the next transport documents:

• bill of lading;
• sea waybill;
• air waybill;
• waybill confirming transportation by car or by rail, etc.

What are the Tj chinafreight advantages based on the DAP Incoterms?

A lot of Chinese manufacturers trust the delivery process to Tj chinafreight.

As a reliable freight forwarding company, Tj chinafreight has clear advantages against competitors:

• High efficiency. We always try to choose the fastest routes to fulfill your order in the shortest time;
• 7/24 online support. You don’t have to worry about the time zones and delays connected with them;
• Better freight rates. Tj chinafreight has private contracts with various carriers which give us the best prices for their services;
• Professional brokerage services. Completing Chinese customs might be a tricky process without the help of experienced Tj chinafreight brokers.

Please, leave us a quote if you want to require more information about Tj chinafreight services.

What are the top things to take care of for the buyer and seller?

If you want the process of delivery to go smoothly, please keep in mind the next simple tips:

1. Accurate paperwork only, from both parties. If your documents will have some flaws, the whole process might be postponed and additional charges might appear.
2. Choosing the right HS code for your products. The HS code is used mainly to decide which tariffs to imply for one or another product. If you pick the wrong code, it might affect the customs clearance procedure.
3. Pay attention to extra import duty, such as anti-dumping duty and other special trade duties (please read the linked guide if you want to learn more about these charges).
4. Take care of the delivery time. Buyer and seller have to choose the fittable shipping schedule based on the delivery time.
5. The consignee’s broker must finish the customs clearance in time. If there will be some delays, the additional charges will arise as well.

Choosing Tj chinafreight as your partner you can be sure that there will be no issues with the delivery process.

What is the difference between the DAP and FOB Incoterms?

FOB (Free on board) terms state that the seller has to deliver goods through the ship’s rail at the port of shipment.

This means that from now on, the buyer must bear all arising costs and risks.

The DAP Incoterms, on the other hand, suggest more responsibilities for the seller, such as export duties, delivery costs, etc.

What is the difference between DAP and DDP in Incoterms for shipping?

DDP (Delivered, Duty Paid) is one of the closest terms to DAP.

The main difference is that under the DDP Incoterms, the seller is additionally obliged to perform customs procedures in the country where the goods are imported.

This means that the buyer is placed in an even more advantageous position.

What’s the difference between CPT and DAP terms?

CPT (Carriage Paid To) and DAP terms are practically the same.

CPT means that the seller pays the freight for transporting the goods to the specified destination.

In practice, such a specified destination is similar to the place, mentioned in DAP Incoterms.

So what is the difference, you may ask?

First of all, it is about the transfer of risks: under CPT, they are transferred when the supplier passes goods to the first carrier, while under DAP, the seller bears with all risks until the delivery of the products to a certain place.

Another difference is connected with unloading: CPT gives this responsibility to the seller, while the DAP – to the buyer.

How to differ DAP and CIP terms?

Firstly, the difference lies in liability for the risk of loss of cargo.

Under DAP Incoterms, if the carrier loses cargo on the way to your country, this will be the sender’s problem.

Under CIP (Carriage and Insurance Paid to) conditions, this will be your (buyer’s) problem.

Another difference lies in the insurance responsibilities.

The DAP Incoterms do not have any clauses about insurance, while the CIP rules oblige the seller to pay for insurance.

What is the difference between DAP and EXW Incoterms?

EXW (Ex Works) provides for the seller’s minimum responsibilities: simply placing the goods at the disposal of the buyer at the seller’s premises.

Ex Works is often the cheapest and the most hassle type of Incoterms for you.

What’s the difference between DAP and DDU shipping terms?

DDU is short for Delivered Duty Unpaid.

It is an old term which is practically the same as DAP.

Just like the DAP, the DDP oblige the seller to deliver some kind of products at the named place in the country of importation.

As we’ve already mentioned, DAP rules were introduced in Incoterms 2010.

Basically, it is a general provision which has replaced three terms: DAF, DES, and DDU.

The vast majority of trade partners, who have used DDU rules before the Incoterms 2010, have switched to DAP eventually.

However, it is not restricted to use old Incoterms, so the DDU rules are also quite popular.

What is the difference between DAP and CIF shipping terms?

CIF is an abbreviation for Cost, Insurance and Freight.

The first difference between DAP and CIF Incoterms is insurance responsibility.

DAP has no insurance obligations for parties at all, and CIF makes the seller responsible to pay for minimum insurance coverage.

Secondly, the CIF terms can be used only for the maritime and inland transport, while the DAP Incoterms fit for any kind of transport.

Finally, the difference lies in the carriage obligations of the supplier: CIF terms state that he has to deliver goods to the port of destination, while the DAP rules speak of the delivery to some certain location.

How to differ DAP and DAT shipping terms?

DAP and DAT are the new set of rules introduced in Incoterms 2010.

These terms are included in group D, which means that the transfer of the obligations is carried out at the buyer’s location.

The DAP means the delivery of cargo to a specific point.

This condition is general in the transaction, so it is important to determine the destination in the most detail when making delivery.

The DAT rules, on the other hand, implies delivery to the terminal.

In addition to the final delivery point, the difference lies in the unloading responsibilities.

Under the DAT terms, the goods have to be unloaded by the seller at the terminal, while the DAP rules give this responsibility to the buyer.

Where is the named place for handling goods and responsibilities to the buyer?

It still might be quite confusing for some of you to understand, what is the named place in the DAP terms.

The only thing that Incoterms 2010 state about it is that it has to be situated outside the supplier’s country.

Logically, you would rather choose some certain place inside your home country, but there are still some nuances.

The seller is responsible for the security of goods until they arrive at your place, as well as for their transportation inside your country.

If the supplier doesn’t have the means to do that, then he may insist on the usage of the DAT set of rules.

Does DAP Incoterms include unloading services?

No, as it was already mentioned, unloading is a 100% obligation of the buyer under the DAP Incoterms.

Who will pay the freight charge, local destination, and destination charge if the Incoterms is DAP?

Under the DAP Incoterms, all the above-mentioned charges have to be paid by the supplier.

Can I have a container of goods shipped from China directly to my property?

Yes, this is exactly why the DAP Incoterms were created for.

Under such rules, the supplier is obliged to deliver goods to your property or another needed place.

The only thing you left to bother as a buyer is an import customs clearance and in-time unloading of arrived goods.

Do DAP Incoterms include insurance?

Neither party should insure the goods under the DAP Incoterms.

Nevertheless, both the buyer and the seller should be interested in receiving compensation in the case of loss or damage to the goods.

Therefore, it is recommended to add an insurance company option to your contract formula.

What are the main issues of using DAP Incoterms for the buyer?

If you want to buy something and choose the delivery under the DAP Incoterms, please be aware of two main things:

1. You have to be able to perform import customs clearance (if you can’t do it, you can always rely on customs brokers).
2. You have to be able to unload goods at a certain time, discusses with the seller previously.

If for some reason you won’t be able to fulfill such requirements in time, all additional charges for the delay would be on your part.

Do DAP terms include customs clearance?

Yes, like any other type of Incoterms, DAP rules have clear instructions for the customs clearance process.

The seller has to pay all customs costs for export, while the buyer is obliged to pay for import customs clearance.

What shipping method can be used in the case of DAP Incoterms?

According to DAP conditions, any type of transport can be used: air, sea, rail, road, or a combination of various modes of transport.

What are the main steps in the delivery process under the DAP Incoterms?

The whole process of the delivery under DAP rules can be divided into the 6 key steps.

Step 1. The seller picks up goods and delivers them to the shipping company he chose before. He pays for this initial delivery, and future freight services.

Step 2. The export customs clearance is needed to be done, with the help of customs brokers or employing the supplier’s means.

Step 3. After the goods are stowed on the ship, aircraft or some other mode of transport, the transit process begins. The seller and carrier are both responsible for the goods during their international transfer.

Step 4. When the products arrive in your country, this is the moment you start acting. Remember, that under the DAP terms, the buyer has to provide the import customs clearance.

Step 5. After the customs clearance procedure is successfully done, the seller loads the goods to some kind of transport and drives them to your location. 

Step 6. At the final step, you have to unload the products from the buyer’s vehicle at a certain time. The seller passes the responsibility for goods to you, as well as all accompanying documents.

Since most of the foreign trade is served by sea transport, foreign trade insurance issues are addressed through the marine system.

Within its framework, insurance is carried out for ships, transported goods and liability insurance for ship owners.

Due to the active development of container transportation, an independent type of marine cargo insurance has appeared.

What is marine cargo insurance?

Marine cargo insurance is a type of property insurance.
It secures goods while in transit against loss or damage.
Such issues can arise from dangers associated with the navigation of the sea waterways.

The most known marine cargo insurance conditions are published by London Institute of Underwriters (Clause “A”, B”, and “C”).

What is a marine cargo insurance policy?

If you or your supplier decided to use marine cargo insurance, you have to finalize this agreement.
The marine insurance policy is issued only when the contract has been finalized and it would be legal documents of evidence of the contract.

The form of marine insurance policies has been taken from pretty old times.

The Marine Insurance policy covers the loss or damage to property caused due to:
1.Natural disasters like cyclone, earthquake, lightning, etc.
2.Man-made disasters like theft, violence, and piracy of ships.
3.Collision, overturning or derailment of land conveyance.
4.Sinking or stranding of ships.
5.Expenses such as survey fees, forwarding costs, and reconditioning costs.

What does marine cargo insurance cover exactly?

The Marine Insurance policy covers loss, partial or total destruction of cargo in the following cases:

Significant natural disasters including earthquake, tornado, storm, etc.

Malicious destruction or theft of goods by people.
Acts of war.

Collision, overturning or derailment of land transport.
Sinking or stranding of ships.

Financial costs such as survey fees, forwarding costs, and reconditioning costs.

Marine cargo insurance covers your goods for any loss or damage while in-transit on the ocean.

Where can I purchase marine cargo insurance?

You can buy an insurance policy from special insurance companies that are involved and specialized in the insurance of sea cargo.

You can find these companies in two ways:

1. search them yourself using Google;

2. Ask the carrier company that will be involved in the transportation of goods for specific recommendations.

The second option is preferable, as the company knows the nuances and specifics of your cargo.

• What is marine cargo insurance?

Who needs marine cargo insurance? Why is marine cargo insurance necessary?

Both buyer and seller, as well as other secondary parties in international trading, have to be interested in marine cargo insurance.

It helps to secure your financial contributions from unforeseen issues.

What are the main terms and definitions for marine cargo insurance topic?

There are some key terms which you have to understand before applying for marine cargo insurance.

Cargo. These are goods, merchandise or commodities of every kind that may be carried on a vessel. This happens generally under a bill of lading

Bill of lading. It is a document for goods which the supplier gives to the shipper before transportation. Bill of lading is also a contract between the carrier and the shipper, which sets forth the terms and conditions under which the merchandise will be carried.

Theft. It means the disappearance of the cargo unit with clear evidence that it has been stolen.

Demurrage. This term refers to compensation per day or per hour for earnings which are lost as a result of the delay.

Actual total loss. Actual (absolute) total loss refers to the loss of insured goods due to the following reasons:

1. Complete loss or destruction of goods.
2. Goods have been damaged very badly.
3. Irretrievable deprivement (goods are not damaged, but they can’t be transported to the owner because of theft, capture, etc).

Deviation. The deviation is a situation where a vessel proceeds from the port of departure to the destination, by an unusual or improper course. Some marine cargo policies contain a clause by which parties agree to cover the insured interest in case of deviation and connected losses.

Invoice. An invoice is a commercial document which sets forth the terms and conditions of the sale of goods. It contains the list of sold goods, their quantity, the price per unit, the party or parties to whom the goods are sold. Depending on the terms of sale, the charges for freight, insurance and other services performed can be also mentioned in the invoice.

There are a lot more terms and conditions in the insurance topic.

You can check the vast majority of them visiting this helpful page.

Also, you can check other marine cargo insurance definitions later in our guide.

How much does marine cargo insurance cost?

The best insurance option for small business owners is insurance through a carrier company.

This usually costs $.60 per $100 of the shipment’s insured value.

Examples of cargo insurance companies for small business:

• CoverHound
• Insurance 321

The amount of cargo insurance rate usually consists of two components: a percentage of the cargo value and the cost of delivery.

The average percentage of the delivery cost in the insurance market is 60%.

Marine insurance vs cargo insurance: what is the difference?

Marine insurance is a broad definition, which includes various types of insurances.

Hull insurance. Insurance issued by shipowners. It covers costs in the case of damage to the ship (ship’s hull and all furniture).

Machinery insurance. This insurance type covers damage to the machinery components of the vessel. To receive payment for this type of insurance, an inspection by a specialist is needed.

Protection. Covering risks which are connected with ownership of the vessel.

Indemnity. Covering risks which are related to the hiring of the ship. E.g. Cargo-related claims.

Cargo insurance. This insurance type provides protection to merchant vessels’ corporations. It helps to avoid losing money in the form of freight in case the cargo is lost in an accident.

As you can see, cargo insurance is a separate type of marine insurance.

What is the connection between the letter of credit and marine cargo insurance?

A letter of credit is a promise by a bank on behalf of the buyer to pay the seller a specified sum in the agreed currency.

Marine cargo insurance is commonly required as a fact to issue a letter of credit.

Making so, the bank secures various risks, such as damage and delays.

The bank collects a fee ranging from 1 to 8% of the transaction, depending on its value and complexity.

What are the main exclusions in the marine cargo insurance contract?

Marine cargo insurance doesn’t provide any coverage in the following cases:

1. Loss or damage to cargo due to intentional negligence.
2. Damage to cargo due to delay.
3. Damage due to improper packing.
4. Damage to cargo due to the use of chemical, biochemical or electromagnetic weapons.
5. Loss or damage to cargo due to radioactive exposure.
6. Financial default of cargo owner.

There are less common reasons when an insurance company refuses to cover the damage.

They are negotiated in each particular case and regulated privately.

What are the main types of marine cargo insurance policies?

There are two main types of marine cargo insurance policies:

All risk policy. This type of coverage provides one of the broadest insurance with a wide range of protection against external factors. It can cover most types of physical losses and damages as a result of external influence.

Named perils policy. Unlike the all-risk policy, named perils type covers only the losses caused by the perils specifically named in the policy. It is generally more limited. This policy can include:

1. Vessel collision.
2. Vessel sinking.
3. Derailment.
4. Bad weather.
5. Non-delivery.
6. Fire.
7. Earthquake.
8. Theft, etc.

Also, marine cargo insurance policies can be distinguished in the open and limited policies.

Open marine cargo insurance covers the cargo from shipping point to final destination.

There is no kind of expiration date, also, such policy covers all freight, regardless of value.

Premiums are paid upon receipt of goods.

Please, always pay close attention to the details of your policy and clarify any doubts you may have with your insurance provider before signing the document.

What is the general average in the case of marine cargo insurance?

General average is a maritime concept that can be both beneficial and frustrating for you as a buyer.

Under general average, all losses caused during an unforeseen problem at sea are to be divided among owners of the surviving merchandise on the same vessel.

For example, as an owner of a survived cargo, you’re obliged to pay financial compensation to the owner whose goods have been damaged or lost.

On the other hand, if your goods would be lost, you’ll get the compensation from the owners of survived cargo.

This option might be specifically included in the insurance contract.

Marine cargo insurance subrogation: what is it?

Subrogation means substituting of one creditor for another.

In some insurance contracts, including marine cargo insurance, subrogation is applied to recover the loss from the errant party.

It is a right of the person enduring the loss to legally pursue the guilty party.

If the loss is insured, and the insurer pays the amount of loss, the party receiving the benefit must forfeit the right to pursue the guilty party.

What are the key principles of marine cargo insurance?

Here are the main key principles which apply to a marine insurance policy.

The utmost good faith principle. All types of insurance policies rely on the principle of utmost good faith. It clearly states that at the time of filling the policy document, the applicant should disclose the correct information. Also, the applicant should not hide any material information needed for policy fulfillment.

The insurable interest principle. It is necessary for the buyer to have a clear interest in the subject for which the insurance is needed. It means that the buyer should be benefited from the safe arrival of goods and should suffer losses due to damage of goods. Sometimes, the buyer doesn’t have an insurable interest at the time of buying a marine insurance policy. However, he should expect to get such interest in the future.

The indemnity principle. In this principle, the buyer would be compensated only to the extent of the loss. It means, the person should not purchase marine cargo insurance to earn profits. In any case, the buyer (the policyholder) will not get more than the actual loss.

The causa Proxima principle. At the time of loss, the buyer of marine insurance has to look at the nearest or proximate cause. It would help in deciding the actual cause of loss if there were a series of causes which have attributed to the loss. If the proximate cause is insured, the marine insurance company has to settle the claim.

The loss minimization principle. The fact of marine insurance policy doesn’t mean the parties can act carelessly. The buyer and supplier must take all the steps to minimize all possible risks. The policyholder can’t behave irresponsibly during an accident just because the property is insured under marine cargo insurance.

What is the basis of valuation for marine cargo insurance?

The basis of valuation sets out how the cargo has to be valued if the insurance case arises.

The basis of valuation is needed to calculate the premium and the value of a loss against a policy.

Can marine cargo insurance be used for individuals?

Yes, marine cargo insurance can be used both by businesses and individuals.

How is the marine insurance premium for cargo calculated?

An insurance premium is the amount of money the buyer pays for an insurance policy.

In practice, marine cargo insurance premiums are calculated on a rate of X per $100.

For example, if you have a cargo valued at $15,000 and the rate is .25 per $100, you take $15,000/$100 = 150 X .25 = $37.50 in total premium due.

However, check the policy for a minimum premium: most insurance policies can have such figures.

How marine cargo insurance is related to customs clearance?

Some buyers might require insurance from delays, which arise due to customs clearance.

However, it is illegal to insure such things as customs clearance.

Actually, it is one of the main exclusions from rules of all-risk coverage policy.

What exactly Incoterms 2010 speaks of the marine cargo insurance?

The word “Incoterms” is short for international commercial terms.

Such terms tell the parties what to do with respect to carriage of goods from the seller to buyer, export and import clearance, the division of costs and risks between the parties.

Also, some Incoterms 2010 contain clauses about marine cargo insurance:

1. Cost and freight.
2. Cost, insurance and freight.
3. Free Alongside Ship.

Please, read out full Tj chinafreight guide if you want to learn more about the Incoterms 2010.

Does marine cargo insurance cover theft?

Yes, marine cargo insurance covers the loss, damage, or theft of commodities while in transit.

Marine cargo and inland transit insurance: how are these two differ?

People often confuse inland transit insurance and marine cargo insurance.

The truth is that they are really quite similar.

However, there are a lot of differences between the two insurances (three to be exact).

By definition. The inland transit insurance covers the insured goods when being transported by land. And the marine cargo insurance, as you may assume, is an insurance that protects the buyer from the loss of goods when they are transferred by sea.

By transportation. Obviously, the methods of transportation can make a difference when deciding about these two types of insurance. Basically, the inland transit insurance doesn’t cover the transport of goods by sea or air. But, if there is a waterway connection in your country the inland insurance can actually protect you from the maritime issues.

Does the HS code matter for marine cargo insurance?

You would have seen the HS code across many documentation connected with international trade.

HS Code stands for harmonized commodity description and coding system.

This is the common standard worldwide for describing the type of commodity.

In general, the vast majority of such commodities fit the general rules of insurance.

However, there are some products in HS classification which require special rules of insurance (such as hazardous materials, explosives, etc.)

The marine cargo insurance of such goods can cost you more than in the case of general commodities.

What do different forms of marine cargo insurance documents mean (proposal form, application form, claim form)?

A proposal form is a document completed by you as a buyer when applying for insurance.

You have to fill in information about the risk you are insuring e.g. the cost of your marine cargo.

An application form is practically the same as a proposal form: it is a document which you have to fill before applying for insurance.

A claim form is a document used for requesting payment from an insurance company when something happens with your goods.

What is the marine cargo insurance endorsement?

An insurance endorsement is an agreed addition to some kind of insurance contract.

It can change the terms or scope of the original policy: to add, delete, exclude or otherwise bring shifts to the coverage policy.

Does the FOB Incoterms have a marine cargo insurance option?

FOB (Free on Board) Incoterms do not oblige sides to pay for marine cargo insurance.

In the vast majority of the FOB practical cases, the buyer decides to pay for additional marine cargo insurance to secure his goods.

What is open marine cargo insurance?

The open cover is a marine insurance policy which covers all your shipment during the policy period.

Open cover insurance is most commonly purchased by companies that make frequent shipments.

Such broad coverage helps them to get rid of buying a new policy each time a shipment is made.

Marine cargo insurance cover note: what is it?

A cover note is a legal paper issued by an insurance company that provides proof of insurance coverage until a final insurance policy can be issued.

A cover note is different from a certificate of insurance or an insurance policy document.

A cover note features the name of the insured, the insurer, the coverage, and what is being covered by the insurance.

What is the difference between a marine cargo insurance broker and agent?

Even though agents and brokers perform practically the same functions, there is still a slight difference between these two professions.

First of all, the insurance agents represent only one insurance company, while brokers can represent multiple insurance companies.

Thus, brokers are free to offer a wider range of products to their clients.

It would be right to say that agents work for the insurance company while brokers work for their clients.

Secondly, the difference lies in the licensing process.

Both agents and brokers have to obtain needed education in order to get the license.

These licenses are different for the broker and agent.

Also, such persons are obliged to periodically confirm their knowledge and pass additional exams.

Can I use marine cargo insurance for domestic deals?

Yes, you can use the marine cargo insurance in the case of domestic trade.

Please, head back to the question “Marine cargo and inland transit insurance: how are these two differ?” if you want to learn more about the domestic use of the marine cargo insurance.

Which companies can provide marine cargo insurance?

Each insurance company has to obtain the license before starting the actual work.

The license is given in accordance with the type of commodity which the insurance company wishes to cover in the future.

Each country has different requirements for entities who want to obtain an insurance license.

What is ocean marine cargo insurance?

Ocean marine insurance is a special type of the marine cargo insurance, which protects your cargo from issues in open ocean.

Tj chinafreight offers an assortment of ocean marine policies that can cover any aspect of your marine operations.

Our flexible coverages are backed by a team of ocean marine specialists who can help you get the right insurance for your individual circumstances.

What is the capacity of the marine cargo insurance market?

As you can see from the graph below, marine cargo insurance is the biggest part of the marine insurance market.

What is the future of marine cargo insurance?

The future of marine cargo insurance is tightly connected with the maritime shipping market.

So long as we are using such type of transportation, the need in marine cargo insurance will be a thing.

Are there some disadvantages of marine cargo insurance?

It is hard to mention the disadvantages of marine cargo insurance.

The only thing which comes in mind is the fact that you have to pay premiums for the insurance policy.

However, it is an insignificant cost, if you think of the level of security which you get eventually.

What is the legal status of marine cargo insurance?

There is no single law which describes the standards of marine cargo insurance.

In practice, courts and insurance companies use international practices and their domestic laws when deciding about some kind of insurance case.

When applying for some kind of policy, you have to figure out laws of which country will be used in the case of danger to your goods.

How does marine cargo insurance work for the buyer? What are the steps to get insurance compensation?

Once you’ve bought the marine cargo insurance, you can be sure in the security of your goods.

The process of getting the insurance compensation is called the claim procedure.

If the situation when you need to make a claim under the policy arises, you can follow the next steps:

• in the case of loss or damage to the cargo, you have to immediately inform the insurance company;
• a surveyor will check the mentioned loss or damage;
• after this, the claim form is created, which contains all the proofs and witnesses needed to make the claim;
• for a missing package, the insured party has to provide a monetary claim to the insurance provider and get an acknowledgment for it;
• if the insurance company finds your case as an appropriate, it would approve the claim.

Also, the insurance company can reject the claim in some cases.

If you are not satisfied with the decision of the insurance company, you can approach the court of law with your case.

Can I use Tj chinafreight services to get the needed marine cargo insurance?

Tj chinafreight can become your trusted freight forwarding company, which means that we can provide not only transportation and customs services but also good insurance coverage for our clients.

Choosing us, you get the best options to secure your goods while in transit.

Also, Tj chinafreight insurance partners can customize a marine cargo insurance program depending on your needs to include:

1. International and domestic cargo coverage.
2. Warehousing and storage insurance.
3. Warehouse to warehouse insurance.
4. Protection for a high-value cargo.

International transportation is a tough thing, so you have to use various tools for effective logistics.

One of the simplest of such tools is a standard shipping pallet, which is used to store and protect cargo.

Without further ado, let’s jump straight into the topic of preparing pallets for your next shipment.

What is a shipping pallet?

Pallets are flat constructions used in cargo container ships for supporting goods or containers.

Products are piled on top of these structures.

Why you need pallets for shipping?

There are six main reasons for using pallets in shipping.

Reason 1. With pallets goods move and handle become much easier

The forklift and the pallet together can be used very effective while storing and moving goods.

These two simple technologies provide the easiest way to move product around a loading dock or some kind of warehouse.

The better part of shipping pallets is constructed to be lifted and moved by a forklift.

As you may assume already, floor loaded freight is much more difficult and time-consuming to move without certain equipment.

Reason 2. Some companies won’t ship your cargo without pallets

Pallets are part of the standard shipping method in almost every freight company.

With their help, it is fast and easy to unload trucks and containers.

Freight that is stacked on the floor without pallets is more likely to shift in transit and often requires additional protection.

That is why the vast majority of carriers don’t provide floor loaded freight option to their clients.

If you have to ship floor loaded goods, make sure to reach out to your logistics provider beforehand.

Reason 3. It is easier to track and count palletized goods

Smart management of capacity and inventory is a must for any warehouse, and pallets help to achieve this goal.

With their help, it is easy to separate goods into units for effective count and track.

Pallets are used in various inventory systems such as pallet barcode scanners.

Doing so, the warehouse staff can efficiently monitor stock as well as manage shipments by the barcode IDs on the shipping pallets.

Reason 4. Pallets make available various storage possibilities

Many helpful innovations in storage became available because of shipping pallets.

The forklift can easily pick up and place shipping pallets on high shelves, opening up a huge amount of storage possibilities.

Modern warehouses are able to store products two, three or even more shelves high with a smart slotting process.

Without shipping pallets, a lot of labor hours is needed to place and remove your goods from high shelves.

Note: the warehouse owner has to be sure that your pallet dimensions fit his warehouse’s storage capacities.

Reason 5. For some goods, shipping pallets can provide needed air circulation

Items like fresh produce need to be stored in special ways so they can breathe.

That is why the gaps on the bottom of a standard pallet are vital for properly storing such goods: they provide that space needed for air currents to get in and out.

If you’re shipping items that need air circulation, pallets offer this benefit in a way that most other cargo organization methods can’t.

Reason 6. The vast majority of shipping pallets are reusable

The better part of shipping pallets can be used multiple times.

If you consider yourself as a person who cares about the environment, committing to recycling or reusing your pallets is a great place to start.

What are the most important tips for using shipping pallets?

It is not so easy to effectively use pallets while shipping your cargo.

Here are some useful tips which you can use when preparing your freight.

1. The shipping pallets have to be suitable for the size of the container. If they somehow exceed such limits, the shipping company won’t process your cargo.
2. You have to pay attention to the pallet load and superposition. If the cargo is too heavy for pallets, it can be easily damaged during transportation.
3. Some countries’ laws require the use of fumigation or plywood shipping pallets. Such pallets are secured from insects and other environmental effects.
4. If you stack pallets in several layers, the height of one layer should not exceed 1.1 meters (43 inches). In other cases, the load will be too extensive and the whole construction can break eventually.
5. The height of pallets for air transportation should not exceed 1.5 meters (59 inches), while the width should not exceed 2.4 meters (94.5 inches). Due to the special construction of aircrafts the requirements for cargo shipping are more strict than in the case of sea/air delivery.
6. For especially heavy goods, the iron or thick wood shipping pallets should be used. The shipping company won’t process your extra heavy cargo if you don’t use corresponding pallets.
7. The products on the pallet should not exceed the size of the pallet. Another reason why your delivery can be banned by the shipping company.
8. Never use pallets with broken boards or protruding nail heads. This can lead to traumas and damage to goods.
9. Use all the accessible surface of the pallet. It would be more secure and effective to store goods horizontally than vertically.

There are also other nuances about shipping pallets which will be discussed in this FAQ as well.

How does pallet shipping work?

The delivery with pallets involved follows the next steps:

• placing goods or containers on a pallet;
• securing them using strapping, stretch wrap or shrink wrap;
• transporting goods to their final destination.

Simple as that!

What are the types of shipping pallets?

There are two main types of shipping pallets: stringer and block pallets.

Stringer pallets have three long pieces of wood (a stringer) to support the sides and middle, made of parallel boards.

The parallel pieces for block pallets are supported by blocks on the sides and middles of each edge.

Block pallets are commonly known as four-way pallets since they are the same orientation no matter which way they are carried.

They are generally used for heavier shipments because they provide more support for the platform.

We’ll discuss four-way pallets and their features later in this FAQ.

Also, pallets can be distinguished in different types due to the materials used for their manufacturing (e.g. wooden pallets, aluminum pallets, etc.)

What is a step-by-step process for preparing shipping pallets?

Let’s have a look at the step-by-step instructions for palletizing your freight for UPS worldwide express freight, LTL shipments, and air freight.

1. Select pallets. When choosing pallets, select between materials, size, load capacity, etc.
2. Stack your goods on the pallet. There are several key recommendations for the right packaging which is discussed in the separate question of this article.
3. Attach shipment to the pallet. Use strapping or banding to secure your shipment and stretch wrap (use a minimum of 60 gauge, five revolutions recommended) to prevent pieces from getting lost or separated from the load.
4. Label Shipment. Label each pallet with telephone numbers and complete address information including postal code of the shipper and the consignee.

How big are shipping pallets?

The Grocery Manufacturers Association (GMA) is an international organization which represents the world’s largest companies connected with food, consumer products, and beverages.

This association influences the consumer packaged goods industry around the globe.

Its specialists suggest standard pallet dimensions to be 48″ x 40″ (121 cm x 101 cm).

Such shipping pallets are generally known as GMA pallets.

The next most common pallet dimensions are 42” x 42” (106 x 106 cm) and 48” x 48” (121 x 121 cm) respectively.

Please keep in mind that these are the average figures, and different shipping/storing companies can use shipping pallets with unusual dimensions.

What is a four-way shipping pallet?

Four-way shipping pallet is a huge construction, which includes top deck boards, stringers or stringer boards and blocks, as well as bottom deck boards.

When constructed with blocks, the pallet is known as a true four-way entry pallet and can be entered from each side by various lifters and power jacks.

Four-way shipping pallets provide great strength when required for heavy loads and are generally more robust than two-way pallets.

However, they are quite difficult to repair compared with the two-way type.

How can I protect my palletized shipment from damage?

It is not hard to keep your goods from damage while they are shipped on pallets.

Here is some helpful advice to do so:

1. Use stretch wrapping (it is a quite effective way to keep all units of a shipment in one place).
2. Use load protectors (layers of corrugated fiberboard or heavy paperboard that help to evenly distribute the weight of shipments that can be stacked upon one another).
3. Use corner and edge boards (boards increase vertical sustainability of cargo, prevent damage to edges, and stabilize the load).

What is a flush shipping pallet?

The flush pallet is a pallet built with the boards and stringers or blocks flush along the sides of the pallet in the standard style.

All edges of such pallet are square.

Where can I get shipping pallets?

In the better part of shipping cases, the supplier is a party which has to pack the goods before starting the delivery process.

However, not all companies can provide such services.

Moreover, if you want to buy goods from separate suppliers and pack them as one cargo unit, you have to find the third party which will help you pack altogether.

This is the situation where Tj chinafreight specialists can easily help you.

As your trustful freight forwarding agent, we can make sure that your goods will get to you in one piece.

Please keep in mind that Tj chinafreight charges additional fees for packaging and stacking goods on pallets.

What are shipping pallets made of?

The vast majority of pallet market is presented with wooden pallets.

The two most common wood types used for making pallets are southern yellow pine and oak.

Also, you can find metal, cardboard and plastic pallets on the market.

How to disassemble wooden shipping pallets?

There are various methods on how to take apart shipping pallets.

Let’s have a closer look at one of them.

Step 1. Choose the pallet which has no visual wear out signs

Although the damaged pallets might be easier to pick apart, the wood is more likely to be damaged after the procedure.

Step 2. Put on some safety goggles, work clothes, and gloves

Please, never neglect your safety while disassembling wooden shipping pallets.

Step 3. Put the pallet up in the way that it would be securely clamped to a surface

It would be much easier to make out the pallet if it would stand steadily.

Step 4. Find the two main vertical pieces of wood on the pallet

The smaller horizontal slats (usually two-by-fours), should be nailed to these pieces to create the top surface of the pallet.

Step 5. Unfasten the nails connecting two-by-fours

You should use some special tools to perform this step (such as a crowbar or saw).

Step 6. Continue disassembling the horizontal bars of the pallet

Please, watch the video below if you want to learn more about the pallets disassemble process.

https://youtu.be/PzIHqsBwy6w

How are shipping pallets treated?

Why are the pallets shipped overseas marked “HT”/”MB”?

Most of the shipping pallets in the world are treated with pressure and heat while manufacturing.

Such shipping pallets are marked with “HT” sigh.

Also, shipping pallets can have an “MB” mark, which means that they are fumigated with the neurotoxin and carcinogen methyl bromide.

The above-mentioned procedure is needed to secure wooden blocks from insects.

How to dispose of shipping pallets?

First of all, many manufacturers offer return programs so you can simply contact them and arrange the delivery.

In the better part of countries, you can sell used pallets. There are a lot of pallet recycling companies who can buy your shipping pallets.

Let’s mention that shipping pallets are very popular for repurposing. You can use scrap materials from pallets in a billion ways.

Are cardboard pallets good for shipping?

Cardboard pallets are much lighter than wood or plastic constructions.

On average, each cardboard pallet weighing less than 10 kg (22 lbs).

As you may assume, this is the main reason why you can easily handle such pallets.

Also, the lightness of cardboard pallets can help you to reduce shipping costs.

Cardboard pallets are safer than others because there is no risk of damage or injury due to nails.

On the other hand, cardboard pallets are not as robust as wooden structures.

That is why you can’t use cardboard pallets for extra heavy cargo movement.

What are the recycled shipping pallets?

Some types of shipping pallets can be effectively recycled.

As an example, the wooden pallet can be disassembled for scrap wood, turned into yard mulch, or used as boiler fuel.

What is the difference between a pallet and a skid?

A skid is a single-deck loading platform which has no bottom deck.

It is a low-profile structure which stands on pedestals attached to the deck.

Skids were quite popular in shipping before the creation of the modern pallet.

How much weight can a shipping pallet hold?

A standard pallet can withstand up to 4.600 lbs (2086 kg) of weight.

The shipping pallet weight is between 30-48 lbs (13.5-21.8 kg).

How high can you stack a pallet for shipping?

If you decide to palletize your cargo, the shipping boxes would be stacked on a pallet in a pattern that allows the most boxes to fit within a reasonable set of dimensions.

According to the international rules, they should be stacked up to five feet high, but not exceed sixty inches total.

What are the racks for shipping pallets?

The racking system is a handling storage system created to store goods on pallets in horizontal rows and on multiple levels.

Such shelf is made up of horizontal cross beams that attach to vertical upright frames.

This helps to effectively support palletized material that can be easily accessed by forklifts.

One of the most popular types of pallet racking is “teardrop” pallet rack.

Additional tools like wire decking, column protectors, row spacers, storage bins, racking protectors and safety guards are often used in addition to pallet rack.

How much do shipping pallets cost?

Wood pallets are the most popular type of construction, accounting for roughly 95% of the market.

Logically, pricing for wooden pallets might vary in different countries because of material and manufacturing costs.

As an example, in the USA, the two-way pallet recent pricing has been in the $11.25-12.50 range.

Four-way pallets, on the other hand, cost more, around $25.

If you are shipping from China, you need to understand the FCL shipping and LCL shipping.

Some times, you can save a lot of money if you find the best shipping solution between the FCL and LCL shipping.

Not every time, when your goods not enough for one full container, you have to choose LCL shipping.

Some times, FCL shipping cost even less than the LCL shipping. So check our FAQ guide and to be the expert for this meaning.

What is LCL shipping?

LCL in full refers to Less than Container, it refers to a situation where an importer or exporter has to share the space in a container with another importer or exporter.

In LCL shipping, the goods are marked with a symbol to help identify your goods.

The marks are also used to classify the goods based on how fragile they are, for example, the color red or orange is used for dangerous cargo.

How is it different from FCL shipping?

LCL is different from FCL shipping because you do not have to pay for the whole container space, whereas in FCL, you pay for the whole container.

FCL refers to Full Container Load.

There is a fixed rate for using the whole container regardless of whether your goods fill it up or not.

There are different types of containers available for FCL shipping.

Which is Best? FCl or LCL?

Generally, FCL shipping is faster than LCL as they do not need to go through many stops.

Your goods are safer in FCL shipping as you’ll have more control over how your goods are handled.

Per cargo unit, FCL shipping is also cheaper than LCL though it might be better to use LCL if the shipments are very small.

In FCL shipping, there may be restrictions on the minimum volume you have to import or export.

It all depends on the size of your goods and the fragility.

How do I calculate an LCL import price?

LCL shipments are calculated by either measuring the weight of the goods or the cubic meter (Cbm).

If the cost as calculated by the weight of the goods is more than that of the volume (cbm), then the weight cost will be used.

If the volume cost is greater, the volume cost will be used.

How is the CBM calculated?

CBM is used when the total weight of the goods is not more than one ton.

To calculate the CBM, the length, width, and height of the goods are multiplied.

In a situation where the length of the product is 2.3 meters long, while the height is 1.4 meters with the width at 2 meters, then the volume can be calculated by multiplying the three– 2.3 x 1.4 x 2, which gives 6.44 CBM.

This CBM would then be multiplied by whichever rate the freight forwarder gives.

What is the FCL container size?

There are many types of container sizes in FCL for moving different types of products.

There is the 20- foot container for moving dry cargo, which has a length of 5.932 meters, with the width at 2.350m and the height at 2.410 m.

The cubic capacity of this 20-foot container is 33.6 CBM or 1166 Cubic ft.

The maximum payload is 18600 kg.

There is the 40-foot dry cargo container with a length of 12.043m, a width of 2.336m and a height of 2.379m.

The CBM is 67/ 2366 cubic feet. The maximum payload is 27340kg.

There other dry cargo container types, see the image below:

There are also refrigerated FCL containers used for moving perishable goods.

Flat rack containers

Open Top containers

Tank Containers

These containers might have slight differences based on each country.

What is the FCL shipment procedure?

In FCL shipping, an empty freight container is picked up at the container yard, it is then moved to the shipper facility where the goods will be loaded onto the container.

After this, it will be transported to the loading port by either truck or rail after it will then be shipped.

The container then stops at the port of arrival from where it moves to the final destination.

What are Shipping Incoterms?

Incoterms in full stands for International Commercial Terms.

They are trade terms used in international and domestic trade fronts for the sale of goods and were developed by the International Chamber of Commerce.

To prevent problems or misunderstanding, these trade terms have been widely adopted by shippers, traders, and the government.

The shipping Incoterms include FCA, EXW, CIF, etc.

How can one find the best FCL and LCL shipping prices?

For LCL shipping, only work with a freight forwarder that has his own LCL container.

It will be cheaper this way as he does not have to pay a commission for the container.

To get the best FCL shipping prices, contact many providers and compare their prices with each other.

Go to the cheapest provider.

What are palletized LCL shipments?

Palletized shipments are goods placed on a wooden platform called a pallet.

The goods are placed on the pallet and wrapped with bands and foil to keep them together.

This is the best way to transport cargo as the goods will be protected.

What is Loose LCL Cargo?

Loose LCL cargo refers to goods that are stacked on top of each other during transportation.

Though loose loaded cargo will save space and cost, it is not a very safe way to transport goods.

How much will ship a full 20ft container cost?

Though the price varies depending on a number of factors, shipping a full 20ft container should normally cost about £1,000 to £2000.

How can one track goods in FCL shipping?

The movement of the goods in FCL shipping can be tracked by either checking the shipping line website or by contacting the shipping agent.

Is it possible to track goods in LCL shipping?

Goods can be tracked in LCL shipping through the container number/Bill of lading/booking number.

What are the types of tracking system

There is the standard container tracking system and there is the GPS container tracking system.

The Standard container tracking system observes the movement of the cargo once it goes through important ports and stops.

The GPS container tracking system shows where the container is exactly anywhere in the world.

If you are an Amazon seller and need to import your goods from China, then you need to ship your goods from China to Amazon FBA.

It can be really difficult especially you are new to importing from China.

So read our Ultimate FAQ Guide to get the benefit.

This is a FAQ guide for you to save cost and time, if you can not find the answer to your problem, do drop me an email, I will be there and wait for you.

How do I ship from China to FBA?

There are three ways to ship from China to Amazon FBA.

You can choose to ship from China directly to Amazon’s FBA.

This method is cost-effective and quicker than other options.

On the other hand, you can choose to ship to your home or use a middleman for inspection before shipping to Amazon.

This way you can ensure and guarantee that your products meet Amazon’s strict quality requirement.

Can I ship directly from Alibaba to Amazon FBA?

Yes, you can but can be very risky at times.

This is because of the uncertainty on the quality of the products which may not satisfy Amazon’s quality requirement.

So, you need to make sure your supplier satisfies all the quality requirements of Amazon before sending your products to Amazon to avoid rejection.

How much does it cost to ship to Amazon FBA?

The FBA charges two kinds of fees; Fulfillment fees and inventory fees.

Fulfillment fees prices range from $2.41 to $5 for standard size products while oversize fees range from $8.26 to $137.32 for small & special oversized products.

This fee covers all the handling, packaging, shipping of a product.

On the other hand, Inventory fees are charged monthly for warehousing.

Amazon FBA inventory fees for warehousing of standard size products range from $0.69 – $2.49 for every cube foot while oversize products warehousing is surprisingly cheaper with prices ranging from $0.48- $1.20.

How long does it take for Amazon to ship from China?

It takes 4 – 40 days, depending on the means of transportation.

If you use the express shipping method, it takes 4-7 days, while the Airfreight option takes longer and the sea freight usually takes 25-40 days.

Where do I ship my FBA inventory?

You ship to Amazon fulfillment center or warehouse.

To do this, you need to create a shipping order and here are some of the steps;

Go to your Amazon seller dashboard, check under the Inventory tab and click on the “manage FBA inventory.”

Then, click the checkbox to the left of your product listing and look for the “Action on 1 selected” and then click on the select “Send/Replenish Inventory.”

Proceed by clicking on “continue to shipping plan,” and after you’ve packaged and labeled your product according to Amazon requirement, you can complete shipment.

Can I ship my own products on Amazon?

Yes, you can if you use the Fulfilled by Merchant option (FBM) for your products fulfillment and shipment.

This means you handle everything involving your product.

How are Amazon storage fees calculated?

They are calculated based on a per cubic foot space, but Amazon reserves the right to determine the cubic feet your product occupies and in case of conflict; the Amazon law overrules all.

However, there is a monthly fee for the two types of products; standard product monthly price charge range from ($0.69 – $2.49 ) while oversized products monthly price charge range from $0.48- $1.20.

There is also an extra charge charged on products that have stayed at the fulfillment centers for over 180 days.

How do I ship goods to Amazon FBA in the UK from China?

There are three ways to ship goods to Amazon FBA UK from China; courier, air freight, and sea freight.

For smaller packages, it is advisable to use the courier service.

For bulk goods, sea freight is your best option, but it takes longer while the air freight is quicker but expensive.

Should I choose FBA or drop shipping?

For beginners, you should start with dropshipping as the cost of investment and risk lower as compared to Amazon.

However, if you are a seasoned seller, you might want to choose Amazon as the audience, and the profit margin is more significant than drop shipping.

Cost of shipping from China to Amazon FBA USA?

Depending on which means of transport and the size of the product, it could cost as low as $2 for a standard product and as high $137 for an oversize product,

Combined with the means of transportation, the cost of shipping through Airfreight could be as high as $4000 while sea freight which is the cheapest cost around $1200.

How much does it cost to ship 3CBM (~100lbs) from China to an Amazon FBA warehouse in the USA, and what is the easiest way?

Depending on the means of transportation, it could cost around $200 – $530.

To calculate this, you could use the shipping forwarder calculator.

How much does air shipping to Amazon FBA cost?

Airfreight is quite expensive, and it could cost as high as $4,000.

Air shipping weight calculation is calculated by multiplying the Height, Width, and Length divided by 6,000.

 How do you Send Inventory to FBA as a Non-US resident?

To send Inventory to FBA as a non-us resident, you need to have an Amazon account and enroll in the FBA program.

To do this, you need to have a business registered in the United States using a registered Agent.

Also, the business should have a legal address as well as a FEIN with the IRS.

What is Amazon FBA Private Label?

Amazon FBA private label is a product not manufactured for a seller by a manufacturer but sold under the brand label of the seller’s company and fulfilled by Amazon.

 How to save money shipping to Amazon FBA?

One significant way to save money shipping to Amazon FBA is to ship from the manufacturer to Amazon via sea freight.

It eliminates middlemen/agent fees although you have to pay the Amazon freight forwarder to help you get a customs broker and break your shipments.

How to track your shipping from China to Amazon FBA

Depending on what means of transportation used to ship your product, you can either visit the website of the sea or airline company.

Then, input details like the tracking number of your air waybill on the airline’s website while in the case of sea shipping companies,

you input such information like your Shipping Company Name, Container Number, B/L( Bill of Lading) Number or Vessel Booking Number according to your shipping company request.

How to send stock directly from China to Amazon Fulfillment centers?

You can send stock directly using a freight forwarder or shipping companies that specialize in sending stock to FBA.

They help cover custom clearance, shipping, and delivery to Amazon Fulfillment centers, but you must make sure that your products are well prepared, packaged, and labeled according to Amazon’s specification.

How to choose forwarder in China for Amazon Delivery?

To choose a forwarder to facilitate successful delivery of your product to an Amazon fulfillment center, you need to pick a helpful forwarder who can maintain communication, has knowledge of the Amazon business, and most importantly has a warehouse.

What are the significant risks for Amazon sellers shipping from China?

Some of the major risks for amazon sellers shipping from China include but are not restricted to; Ban by Amazon due to failure to meet quality guidelines, fake or counterfeit goods, lousy customer reviews, etc.

What shipping company do you use for shipping from China to Amazon?

Any shipping company certified by Amazon FBA with excellent customer service.

How do you package your Goods for shipping to Amazon FBA?

Amazon FBA is strict when it comes to packaging, and all your goods must meet the set standards.

Understanding Amazon packaging requirements would save you a great deal.

Product Packaging

Packaging involves the materials used, the wrapping, and how you protect your products.

You should wrap the goods separately, and each unit contained within a single secure package.

The materials commonly preferred by Amazon FBA for packaging include boxes, air bubble films, and poly bags.

The poly bags must be transparent with a suffocating warning attached to them.

For protection, use 2 inches of cushioning between each item contained in the box.

The content of the box should be compact without any movement when shaken.

Outer Packing

Amazon FBA specifies special packing while emphasizing that shippers use proper material, and sizes.

According to Amazon’s packaging requirements, outer packaging material should be rigid, and six-sided such as a carton.

The size of the outer packing should measure 6 X 4 X 1 inch.

Also, boxes used should weigh more than 1lb and not exceed 50lb.

Packaging using overweight cartoons can increase your shipping costs and associated risks.

For boxes exceeding 50lb and 100lb, you should provide a label that indicates Team lift and Mechanical Lift, respectively.

Suppose you import jewelry from China to Amazon FBA, your packaging boxes should not exceed 40lb.

How do you Label Goods for Shipping to Amazon?

Proper labeling is critical when shipping to Amazon FBA because it will enable your products to reach the right customer and sell quickly.

All the boxes used in the packaging must have a unique FBA label printed from the shipping queue.

Product labels must have a scannable barcode.

Note that Amazon has its specifications for barcode labels on products.

You can find them here: Amazon product barcode requirements.

As long as your product differs in any manner, for example, in color, they must all have a unique FNSKU printed on them.

How to put the Amazon Label on your Product?

Packaging and labeling go beyond understanding what Amazon requires. Your label must be in the right place.

You have three options for labeling your products for fulfilment to Amazon.

They are:

Labeling through your Chinese Supplier

As part of your trading agreement with the supplier, you can request them to label the goods as per your specifications.

Because Amazon is strict in labeling, you should work closely with your supplier.

The supplier should understand what is required and update you periodically.

Before shipping, ensure you are satisfied with the labeling.

Label it by Yourself

Labeling goods yourself means that you first ship them to your warehouse and label them before sending the goods to Amazon FBA.

This method can be expensive, and you should only consider it if you have extra cash to spend.

Labeling through a Third-party Company

Labeling through a 3^rd party service company is useful.

This is because most 3^rd party agents specialize in Amazon FBA, and they understand the labeling requirements.

When using a 3^rd party service, you will have to facilitate shipping the goods from your supplier to the 3^rd party’s warehouse.

They will label the products as per Amazon’s requirements before loading them for shipping to the relevant FBA site.

China 3^rd party agents are way cheaper than those overseas.

It would save you a lot of money if you find a capable one in China to do the label then fulfill your order to the required FBA warehouse.

What can I do if my Goods are Lost after Arriving at the Amazon Warehouse?

Although minimal, there are chances that your products may get lost or misplaced after delivery to an Amazon FBA warehouse.

In this case, you don’t have to panic as Amazon has laid down steps through which shippers can trace their products.

The steps are as follows:

Contact Amazon Customer Service

Amazon handles many goods, and it may be that the goods are just missing from your platform but not from the store.

Or they could be lost or stolen.

The best remedy for this is to contact Amazon customer care to help investigate the issue and provide a solution.

Prepare your Delivery Receipt

Many things can happen to your products once they reach the Amazon Warehouse.

Remember, a dozen other traders are delivering their products as well.

Providing a delivery receipt will show that, indeed, your goods were delivered and received at the Amazon warehouse.

This way, it is easy to resolve cases where products go missing or lost as there is proof of delivery.

Provide Product Invoice

An invoice is vital if Amazon agrees that they are responsible for your product loss.

You can get the invoice showing the value of the purchased goods from China.

Amazon will use the invoice to compensate you according to the value of your goods.

But this is only, after it has been proven that you indeed delivered the goods to the Amazon warehouse where goods went missing.

How do you Choose a Supplier in China for your Amazon FBA Products?

The choice of supplier, their products, and the prices they offer will define the profits you make shipping from China to Amazon FBA.

Getting a supplier from china is challenging, and sometimes it involves a lot of risks.

The following points can help you choose the right supplier for your products.

Price

Just because a supplier offers lower prices doesn’t mean they assure you profits.

It would help if you looked at their product quality, the terms of sale, MOQ requirements, and location to determine if they are right for you.

Also, ensure that the prices offered have no hidden charges.

The right supplier should offer you genuine prices that, after including all other costs of delivering to Amazon FBA, you should have the right profit margin.

Products

You are competing with numerous other suppliers in Amazon FBA dealing with the same products.

Customers always compare the quality of products supplied before making a purchasing decision.

Therefore, you should have a supplier with quality products that comply with both industry and Amazon FBA’s quality standards.

You can check the products’ quality by verifying the manufacturing process, conducting quality inspections, and asking for samples.

Generally, a through China quality control process for products you ship to Amazon FBA can put you ahead of your competitor’s.

Payment and Shipment Terms

If this is your first time dealing with a customer, avoid paying in advance.

The right supplier would expect at most 50% upfront and the rest after delivery.

When shipping to Amazon FBA, time is of the essence and allowing your supplier to handle the shipping will lead to many delays.

Besides, logistics are usually expensive when you choose to allow your supplier to handle shipping.

It is, therefore, essential to take charge of your consignment and handle them on your own.

That said, there are many ways to find the right supplier for your products when shipping from China to Amazon FBA.

You can find suppliers through recommendations, trade shows, e-commerce platforms such as Alibaba, and even through personal visits to china.

What Documents/Certification should I have to Ship to Amazon FBA?

When shipping from China to Amazon, you need the right paperwork and product certifications.

Otherwise, Amazon may close your listing on their site, and you may even encounter shipping difficulties to a lack of compliance and proper shipping documents.

To avoid all of the above scenarios, find out what Amazon requires you in terms of paperwork before shipping.

Also, find out which shipping and import documents you will need when shipping from China to avoid unnecessary trouble with customs.

All in all, some of the essential certifications that Amazon may require of you include:

• UL 2054 for all battery products to Amazon FBA
• UL 60950-1 for all laptop chargers and adapters
• ANSI/CAN/UL 2272 document for scooters, unicycles, and self-balancing personal transport.
• Safety data sheets for paint strippers.

For shipping from China to Amazon FBA, you will need the following shipping documents:

Bill of Lading

A bill of lading provides details about the movement of your goods from origin to destination.

It is a vital document that determines whether port officials release cargo to you or not.

The document comes in three main types that you need to differentiate for their specific I uses.

Commercial Invoice

A commercial invoice is vital in clearing your goods through customs.

It contains details about the products such as country of origin, the importer, supplier, unit value, and product description.

Telex Release

A telex report serves the purpose of a bill of lading and helps make your shipping to Amazon easy.

This is because the report allows for the release of goods before the original bill of lading is availed.

Other documents that you may need include:

• Certificate of origin
• Packing list
• Phytosanitary certificate
• Dangerous certificate
• Import license
• Fumigation certificate

Do you need Freight Insurance when Shipping to Amazon FBA?

When it comes to shipping, the risk is inevitable.

Your products will exchange hands several times, and you wouldn’t wish to incur the associated resultant losses.

Getting freight insurance can guarantee you up to 100% compensation depending on the insured risks.

You can get your goods insured directly from the supplier until they reach Amazon FBA.

Besides, freight insurance is inexpensive, about 1% of the total value of your shipment.

Which Incoterm should you use when Shipping to Amazon FBA?

Incoterm spells the obligation of the seller and the importer in the shipping process.

When shipping to Amazon FBA, you should use the FOB incoterm because it gives your freight forwarder more freedom.

They can easily plan for your cargo and improve delivery time.

You can use the EXW incoterm for air express method where the goods are under your care during delivery.

Should you do a Quality Inspection on your Amazon FBA Products?

Amazon emphasizes the need to provide quality goods for selling to customers.

Delivering low-quality goods puts your account at risk, and you wouldn’t want that.

Therefore, conducting quality checks is very important.

You can arrange quality checks while the goods are still with your supplier to guarantee quality before shipping.

When do I use Sea Freight to Ship my Products to Amazon FBA?

Sea freight is the best shipping method when your products are above 400kg.

It offers cheaper shipping costs as opposed to express or air transport.

If you have a small shipping budget, sea freight provides the best solution.

Besides, you can either book a Full Container Load (FCL) or Less than Container Load (LCL), depending on the volume of your products.

However, it would help if you were careful when transporting to Amazon through sea freight because of the time lag in transit.

You must plan appropriately and add some time buffer on the logistics.

What is the Import Customs Clearance for my Amazon FBA Products?

Customs clearance is mandatory for any importation to Amazon FBA centers.

In this case, the customs clearance process begins way before the products arrive on the importation country’s soil.

To ensure a smooth clearance process, ensure that all your import paperwork is in order.

Also, have the necessary budget for paying import duties and taxes.

Once all this is done, customs should easily permit your goods from China into the country.

Note that if your goods do not the import country’s requirements, they may be held at customs and not allowed entry.

To ensure that shipments from China to Amazon fulfillment centers pass all the requisite import requirements.

What is an Amazon FBA Shipping Plan, and How do I Create it?

Before your products are availed in the Amazon platform for selling, you must first create a shipping plan.

The plan informs Amazon of the specific items you wish to import from china for selling.

Creating an Amazon shipping plan involves;

• Managing your inventory. This involves selecting a list of products you want to ship to Amazon.
• Replenish inventory. Here you can either create a new shipping plan for new products or add to the existing plan if you have been shipping to Amazon.
• Complete the Ship form. This form contains information on the address where Amazon will pick your products.
• Confirming quantity. In this step, you will see all the products you have selected and the number of units per product.

Your shipping plan should provide information on who will prepare the products and how they will be labeled.

Can I Ship Hazardous Goods to Amazon?

Yes, you can ship all types of goods, including Hazmat products, to Amazon FBA.

The only consideration is ensuring the products all the requisite shipping requirements, including quality, safety, packaging, and labeling requirements.

For Amazon FBA, HAZMAT goods must be packed in corrugates with proper cushioning.

Also, they must be labeled as ‘Fragile’ on the package.

You should also provide accurate information about your products and Safety Data Sheets (SDS).

What are the Factors that Affect Shipping from China to Amazon FBA?

When shipping to Amazon FBA, you don’t want anything that delays your goods from reaching the FBA warehouse.

Some of these factors are unavoidable and include:

Quality Issues

This contributes to the highest number of delays and rejects by Amazon FBA.

The good thing is that you can avoid them.

You can invest in a good quality assurance team to monitor products before leaving your supplier’s premises.

Product Development

Product development takes time, especially when the new product you have requested is unique to the supplier.

To avoid the long delays in product delivery, you can opt to use a different supplier who already has your desired product ready.

Chinese Holidays

Shipping from China to Amazon is challenging during the Chinese New Year (CNY).

Many suppliers in china spend this holiday with their family members.

Fulfilling an order is impossible during this time.

Your only bet is planning for early shipments before the holidays begin in December.

Other holidays that can affect your shipping to Amazon, though not much, include National Week in October.

Basically, you should avoid shipping during peak seasons as, during these times, shipping tends to delay a lot.

When should I Palletize my Goods for Shipping to Amazon FBA?

A pallet is a platform that allows for the transportation of multiple cartons at once.

It makes transportation easy using folk lifts in short distances.

Amazon does not require the use of pallets for all goods being shipped to their warehouse.

However, some goods require pallets and include wooden pallets 40 by 48 inches.

Pallets are heavy and attract more charges while shipping.

Amazon recommends adding them once the goods have reached the destination.

Only those goods that are fragile require pallets pre-shipping.

Consider using the right pallet size and dimensions when palletizing goods for shipping from China to Amazon FBA.

Are all my Products Shipped to the same Warehouse when I Deliver them to Amazon FBA?

When you ship your goods from China to Amazon, they can be subdivided into three groups, each heading to a different warehouse.

This can be expensive because the profit margin will reduce significantly per product.

To avoid this, you can set up a large shipment, say with 6SKUs and 20 units each.

However, this is not a guarantee that the shipments will go to the same warehouse.

Amazon strives to use smaller units of your inventory in different warehouses for easy delivery to customers.

How has Coronavirus Impacted Shipping to Amazon FBA?

Coronavirus has indeed left no tables unturned in the field of business.

Shipping from China to Amazon has been dramatically affected through:

Shipping Times

Many suppliers operating in china have had to cut on their workforce.

This has greatly affected the shipping time as there is less workforce to prepare your goods for shipping.

Additionally, the number of flights and vessels has also reduced, implying that getting a shipping slot is difficult.

As a result of Coronavirus, shipping time has increased, thus significantly impacting shipping to Amazon.

Shipping

If you want to become a real international trading pro, you have to achieve a clear vision of various terms, rules, laws, practices.

One of such practices is using Incoterms 2010 (International commercial terms) when deciding delivery obligations between parties.

In this article, we try to put under the microscope one of such Incoterms – CPT. Continue reading to learn more about this set of rules.

What is CPT in Incoterms?

CPT stands for Carriage Paid To.
It is one of the Incoterms 2010, which can be used by trading parties.

If you do not familiar with Incoterms concept, please, pay attention to our comprehensive guide on this topic.
So, Carriage Paid To contract states that the seller pays for the carriage of the goods to the named destination.

The named destination can be any place (warehouse, home, other facilities) in the country of the buyer.

Let’s find out how other terms of CPT contracts should be carried out.

Who is the carrier in the CPT Incoterms contract?

Carrier is basically any person or company who undertakes the performance of the carriage.

It can be made by rail, road, sea, air, inland transports, or by the combination of them.

Parties can use the services of several carriers.

Who pays for shipping under the CPT Incoterms rules?

If you look through the obligations of parties under the CPT Incoterms, you’ll find clear instructions about the payment responsibilities.

The seller is the party which has to pay for freight.

Also, he has to pay for all the costs of loading the goods and any charges for unloading at the place of destination.

What is the difference between CPT and DDP Incoterms?

DDP is an abbreviation for Delivered Duty Paid.

DDP has more obligations for the seller than CPT terms.

Under Delivered Duty Paid rules the seller has to perform all the procedures to deliver the goods to your doorsteps.

This includes freight costs, import/export customs fees, the carriage in the country of origin and destination, as well as fees connected with obtaining licenses, documents, and so on.

Basically, DDP terms are better for the buyer than CPT rules.

But, DDP sale contracts cost more as well.

What is the responsibility of the buyer and seller under CPT Incoterms?

In addition to obligations connected with costs of freight, under CPT rules the seller must:

1. Provide the goods and the commercial invoice following the sale agreement (as well as any other pieces of evidence of conformity which may be required by the contract).
2. Obtain any needed export licenses or other official authorizations.
3. Carry out all export customs formalities.
4. Pay all costs and duties needed to clear export customs.
5. Deliver the goods to the selected carrier (if there are multiple carriers, the seller is obliged to transfer the goods to the first one).
6. Provide the buyer with the usual transport document (for example, a negotiable bill of lading, a non-negotiable sea waybill, an inland waterway document, an air waybill, a railway consignment note, a road consignment note, or a multimodal transport document).
7. Pay all fees connected with checking procedures (such as checking the quality, measuring, weighing, counting).
8. Provide packaging service which is required for the transport of the goods. Packages have to be marked in the appropriate way.

The buyer also has a strict set of obligations following the CPT rules.

Here are the most important of them:

1. Pay the prices connected with the contract of sale.
2. Obtain any needed import licenses or other official authorization and carry out all customs formalities for the importation of the goods.
3. Bear all risks of loss of or damage to the goods from the time they have been delivered to the carrier.
4. Pay all costs relating to the goods from the time they have been put into the custody of the carrier.
5. Pay all duties, taxes and other official charges connected with importation of the goods, as well as with transfer inside the country of delivery.
6. Whenever the buyer is obliged to determine the time for dispatching the goods, he must give the seller corresponding notice.
7. Accept the transport documents from the seller (e.g. an air waybill, bill of lading, etc.)
8. Pay the costs of pre-shipment inspection in the country of importation.
9. Pay all fees connected with obtaining the documents or equivalent electronic messages.

What is the difference between CPT and CIF Incoterms?

Both CPT (Carriage Paid To) and CIF (Cost, Insurance and Freight) are rules mentioned in the last edition of Incoterms (for the 2010 year).

The first and most important difference between CIF and CPT Incoterms lies in that the CPT terms can be used for all types of vehicles (road, rail, air, sea freight).

On the contrary, the CIF rules can only be used for sea and inland methods of transportation.

Also, the CIF Incoterms oblige the seller to pay for insurance, while CPT rules don’t have such clauses at all.

What is the difference between DAP and CPT Incoterms?

DAP stands for Delivered at Place.

Both DAP and CPT rules oblige the seller to deliver some products at a certain place in the buyer’s country.

However, there is still a significant difference between them.

They lie in the transfer of risks connected with loss or damage of goods.

In simple words, according to the CPT delivery terms, the risks of loss or damage to the goods pass after the seller transfers the goods to the carrier (i.e., loading the goods onto the vehicle/vessel).

According to the basis of DAP delivery, risks of loss or damage to the goods pass from seller to the buyer at the final point of destination.

Note: in practice, all responsibilities connected with the security of goods during the transportation lie on the carrier. So the Incoterms only decide which party has to regulate controversial situations with the carrier if such occurs.

What is the difference between CFR and CPT Incoterms?

Despite the common misconception, CFR means Cost And Freight (not Cost Of Freight).

CFR is very similar to the CIF rules, just without the insurance obligations for parties.

The first difference between CFR and CPT rules lies in the modes of transport which can be used.

As you already know, CPT terms apply to all modes of transport.

And the CFR Incoterms can be used only for sea or inland waterway transport.

What is the difference between CPT and CIP Incoterms?

CIP is an abbreviation for Carriage and Insurance Paid.

As you may assume, the CIP terms have clauses about insurance procedures, which is the main difference if you compare CIP and CPT rules.

So, under the CIP rules the seller is the party which is obliged to pay for the insurance policy.

Otherwise, CIP and CPT rules are the same.

What is the difference between FCA and CPT?

FCA is an abbreviation for Free Carrier.

Both FCA and CPT are rules of delivery introduced in the Incoterms 2010.

Free carrier rules state that the seller is obliged to transfer the goods to the carrier at the named place in the country of origin.

Such products have to be ready for export customs clearance.

When the goods are transferred to the carrier, the seller’s obligations under the FCA rules are considered as completed.

Does CPT Incoterms include insurance?

CPT Incoterms do not oblige parties to buy the insurance policy.

If the seller pays for insurance then this would be CIP Incoterms.

However, as a buyer, you can decide and pay for additional insurance even under CPT.

What kind of Incoterms were used before CPT?

The delivery conditions of CPT are a part of the Incoterms 2010 edition, which is the latest one and is relevant in 2020.

Previously, instead of the term CPT, the DCP (Delivered Costs Paid) delivery basis was used.

The first mention of DCP delivery rules was at Incoterms 1953.

What are the main challenges I’m facing while using CPT Incoterms?

As a buyer, to have to think of several important points while using CPT Incoterms:

1. Transfer of responsibility for your goods happens when the seller delivers the goods to the carrier. From this point, if some issues with your products occur, you have to carry them out with the shipping company by yourself.
2. There is no insurance mentioned in the CPT rules. If you want to secure your goods, you can either ensure them yourself or choose the CIP/CIF rules.
3. Under the CPT rules, the seller is obliged to perform export customs clearance only. You have to be sure that you’ll be able to clear products in import before choosing to use CPT.

What is the Tj chinafreight role based on the CPT Incoterms?

Tj chinafreight is a freight forwarding company, which means that it can provide carriage, packaging storage, brokerage, and customs clearance services.

In fact, choosing our services will help to avoid practically any hassle.

What kind of transportation modes can be used in the case of CPT Incoterms?

CPT Incoterms can be performed by any mode of transport including multimodal transport.

Shipping delays happen quite a lot in the trading sphere.

The reasons might vary a lot, but in the end, such delays can significantly affect your business.

Dealing with this problem might take a lot of will and skill, however, it is quite possible to guarantee that your shipments from China will be delivered as smoothly as possible.

Please, become familiar with this guide if you want to know top tips and tricks on how to do when shipping delay arises.

Let’s also mention that our article fits both buyers and sellers.

Don’t be afraid, this is a very rare scenario, but we won’t lie to you – sometimes it happens. 

In China, however, such a possibility is minimal due to harsh punishment for thieves.

How often shipping delays happen?

Shipping delays are far more common than everyone wants to think.

It is true not only in the case of China.

According to the worldwide statistics, from 6 to 12% of shipments are usually delayed regardless of shipping company or carrier.

So, on average, every tenth package is delayed.

This number can increase even more, to over 30% during times when service companies are overloaded.

One of five shipments deals with certain troubles during the delivery process (like delays or wrongly applied fees).

Even such carrier giants as USPS and FedEx have troubles with the timing of their shipments.

According to US government statistics, the delay rate in January 2020 was 12.87% (for USPS and FedEx packages sent between the USA and Canada).

Speaking of Chinese trading market, the situation with shipping delays is quite the same.

There are no official numbers about the percentage of shipments that were delayed.

However, we believe, that it is about 10 % of cargo is delayed each year when shipping from China.

What is a possible delay?

Sometimes you can see the tracking status “possible delay” while tracking your parcels.

It means that the parcel was received by your shipping company, but it might be delayed for some reason.

For example, there has been a disruption to the transport or delivery network.

This could be something like a flood or a traffic incident.

Why do LTL freight delays happen? How to avoid them?

The main reason why LTL freight delays happen is the impossibility of your shipping company to fill the container in time.

Logically, no one wants to send your single parcel in a huge empty container.

So, the shipping company might take some time to wait for other orders.

What are the demurrage charges? Who pays for them?

In international trade, demurrage refers to fees that the charterer pays to the shipowner for the delayed operations of loading/unloading.

Officially, demurrage is a form of liquidated damages for breaching the laytime as it is stated in the governing contract.

What are the main reasons for shipping delays?

There are a lot of scenarios which can lead to shipping delays.

We’ve gathered the most popular of them, according to international practice.

The most widespread situations are the following:

# 1. The shipment was delayed due to bad weather

The weather can’t be changed, and it badly affects all modes of transport. It is especially the case of maritime delivery.

# 2. The cargo is delayed because of port overload

Even with careful logistics, port and airline operators can’t predict the volume of future operations.

This can lead to overwork on the main routes and, eventually, to shipping delays.

# 3. The transport has changed its way for additional pickups

It happens not so often, but the shipping company can receive additional orders when the transportation was already started.

So, the ship/plane can make additional stops to make such pickups.

# 4. Lack of needed equipment or space on the transport

This situation happens due to logistic errors.

The shipping company can choose the transport that doesn’t meet all the required specifications for the successful carriage of goods.

There are also extremely rare but dangerous situations which can happen in international trade:

# 1. Your cargo was delivered to the wrong place

This is quite a tough situation. Yes, the carrier will do his best to deliver you goods eventually, however, it might take a lot of time.

You can require some kind of compensation from the shipping company or freight forwarder in this case.

# 2. Port operators have lost your cargo

Due to logistic error, your cargo might be delivered to the wrong haulage terminal under the wrong number.

# 3. Your container was stolen

Such vessels still pass through various quality tests but they appear to be broken much often.

# 4. The transport is broken

The vast majority of shipping companies use outdated transport which was bought at a discount.

How to deal with shipping delays (as a buyer)

To be fair, the buyer has little to do when it comes to shipping delay itself.

But there are some preventive means which can help you to avoid such a situation at all or shorten its possibility to minimal.

Let’s take a closer look at some example scenarios which happens quite often in international transportation.

# 1. No space on the scheduled transport

As we said above, sometimes it appears that the transport selected to carry your shipment doesn’t have enough space or equipment to do so.

What to do: Book the needed number of spots for your cargo ahead (approx. two weeks earlier before your goods are ready for delivery).

If you choose Tj chinafreight as your forwarding agent, you can always contact us and provide your specific shipping requirements.

We are aimed to be your trustful partner, not just a transportation service seller.

# 2. Your products can’t be delivered to the port in time

When you order FCL (Full Container Load), the suppliers usually fill the containers by themselves and deliver them to the pickup place.

In the case of the LCL shipment (Less than Container Load), the supplier delivers goods to the warehouse of the forwarder for the following consolidation.

And here’s always a certain cut-off date stated by the selected carrier.

Messing with this date means missing the scheduled transport.

What to do: Order the empty container as early as you can (at least 7 days).

Also, if land delivery is involved, do not forget to order it earlier because it is the most unstable mode of transportation

# 3. Wrong choice of the HS code for your goods

It is not a secret that the suppliers can apply for a tax refund from the government based on the HS code.

Such refund rate can be up to 17%, which is not bad money as you can assume.

This is the main reason why some suppliers might use the wrong HS code intentionally.

If customs staff find out such thing, they can hold your goods until the seller changes the HS code.

Also, the supplier might be obliged to pay penalty fees.

What to do: Work with trusted and reliable suppliers.

Also, Tj chinafreight can help you with transportation paperwork to help you avoid such situations beforehand.

# 4. Obligations connected with property rights

If you buy products under some brand, officials might require an authorization letter from the owner of such brand.

It can cost you a lot of time and money if you don’t prepare everything earlier.

What to do: First of all, be sure that you are working with patented suppliers.

Also, as it was said above, be sure to prepare all the documentation beforehand.

# 5. The vessel left late due to weather

This is a scenario where you can do anything.

Yes, you can try to believe in weather predictions and pick up hot seasons for your delivery, but it will not ensure the delivery time for 100 %.

Except for the above-mentioned scenario, you can actually prepare for unseen circumstances and guarantee yourself a timely delivery.

The easiest way to do so is to plan everything ahead.

Work together with your supplier and freight forwarder to make your shipping processes as quickly as possible.

Other tips

When it comes to the process of transit, the vessel changing its route is the most widespread case.

This is another scenario about which you can’t do anything, even if you are using the help of a freight forwarding agent.

But such agent will be the first who receive the information from the carrier, so he’ll let you know about the delay ASAP.

When the transit process is completed trouble still can arise.

Port delays can be the case for various reasons, including worker strikes, the overload of terminals, etc.

Keep in mind Chinese holidays

If you work with Chinese suppliers on a regular basis, you might already know about the time when holidays come to China.

The vast majority of buyers, however, do not know about such things.

This happens due to the culture gap between China and foreign countries.

There is a huge amount of different holidays in China, which are usually celebrated from a couple of days to three weeks.

Remember, that the following holidays can affect the delivery time:

1. National holiday (first week of October).
2. Chinese New Year (can be celebrated for three weeks according to the lunar calendar).

National Holiday is a time when most Chinese travel abroad or visit their relatives across the country.

There is a huge possibility of delay response from your freight forwarder or supplier during this holiday.

New Year can last up to three weeks, with a big percentage of people moving across the country.

For the better part of hard-working people, this is the only chance in the year to get a break from their duties.

Not all three weeks are actual holidays: officially, the Chinese New Year lasts for 7-10 days.

But we strongly recommend not to appoint deliveries for three weeks in total because there are a lot of exceptions for the above mentioned official rule.

As we said earlier, this time might be the only for the vast majority of Chinese people to relax and spend a couple of days with their family.

Note: the New Year date is calculated in accordance with the lunar calendar.

So, this date changes each year; usually, it covers the end of January and the beginning of February.

What do I have to do during Chinese holidays?

Undoubtedly, you can still decide to buy some goods from China during vacation time.

Business is always a business, and we can understand that.

When shipping from China just before or during holidays, there are two most popular scenarios:

# 1. An overabundance of freight orders

Such a situation happens just before Chinese New Year, in January.

Scheduling delivery is very difficult in this month, and the freight cost is higher than in other months.

# 2. Lack of delivery orders

In March, on the contrary, the freight cost should be relatively low, because there is a lack of products available after holidays.

So, manufacturers need some time to create new assortment.

You can think that it is a good time to make some shopping but it is not true.

Because of orders lack, carriers will take much more time to fill vessels.

What to do: Try to avoid these two holidays and their aftermath.

Require certain dates for the next New Year from your seller.

Keep in mind that in the case of delay the best thing you can do is to stay in touch with your freight forwarder.

Also, do not forget to add some kind of buffer days to your supply chain.

This will help you to avoid serious troubles if your shipment was delayed.

How to deal with shipping delays (as a seller)

The supplier has a lot of power to deal with shipping delays when it comes to them.

When such a situation arises, the seller can do a bunch of things to ease the anger of the buyer.

# 1. Speak with your clients

Obviously, it is extremely important for you to constantly communicate with your clients.

In other cases, your customer would be frustrated not only because his cargo was delayed, but also because there is absolute silence from the supplier’s side.

So, you have to be the first person from whom your customer will get such bad news.

Apologize if you should and try to explain the situation to them.

# 2. Use auditing and logistics services to account carriers activity

This is one of the most effective ways to ensure you get the time-bound service you deserve.

The better part of shipping companies provide refunds they delay the delivery process because of their mistakes.

That is why you need to audit partner shipping companies and request subsequent refunds each time they screw up the delivery time.

Using automated audit services can significantly reduce your costs and provide effective control over partner shippers.

# 3. Find a real-time tracking service

Find and apply for a service that will provide you tracking info in real-time.

Not all tracking services give such an option, but there are a lot of precise systems which will help you be informed every minute.

So, when you find out about the delay, you can perform some useful actions: send another parcel to your client or inform such person beforehand.

# 4. Take control over the delay scenario

It is much easier to say than do, but you have to act as a person who really wants to solve the situation.

You don’t even have to try to avoid direct actions because it will show you in a bad light.

Do not email your clients and partners if you want to act fast.

Take calls to receive and provide updates immediately. Don’t hesitate to make decisions which will be the best for your client.

Doing so, you’ll gain a lot of trust from your customers.

# 5. Give your client the power to make decisions

Your client will be glad to have some degree of control over the delay scenario as well. 

Give them some options or provide the power to decide how to deal with shipping delays.

You can send them goods for replacement and then recover the delayed package from the carrier.

Or, you can provide your clients with discounts, bonuses, compensations, and so on.

# 6. Use special offers

As it was said above, this is a great step to make special offers to your clients.

This can serve as the smartest step toward pacifying your customers’ anger and also make them feel valued.

For instance, you could provide them 50% off on the total value of their next shipment.

Or you could provide free shipping on their next two orders.

You can come up with your own ideas on how to make your clients happy.

# 7. Beware of empty promises

Some companies tend to make empty promises.

The vast majority of them just want to stay fit with the trend.

And the nowadays trend says that the packages should be sent ASAP after the order was done.

So, you can see a lot of freight forwarders, suppliers and shippers, who state that the delivery will be 100 % done in 10/15/20 days and so on.

Such statements make huge risks to arise: if you do not fulfill these promises, your customers would be in pure rage.

Try to avoid such things if you can’t really guarantee meeting the delivery deadlines.

# 8. Use multiple shipping partners

Obviously, you have to use only reliable shipping companies as your partners.

However, even the most trustful partner can have some issues with delivery processes.

That is why you need to have a full deck of shipping companies up your sleeve.

Sure, this might require attentive research on your part to identify the expertise of each carrier.

Frequently Asked Questions

Do Incoterms 2010 speak of shipping delays?

Nope, Incoterms 2010 do not have clauses or clear statements about responsibility for shipping delays.

When such things happen the buyer contacts the supplier, who on his part contacts the shipper to figure out this scenario and get some kind of compensation for its client.

How to avoid longer shipping times (especially when drop shipping)?

The shipping time might be reduced with the help of various means.

Please, watch the useful YouTube guide on this topic, listed below.

https://youtu.be/LDMzbMjujkQ

Does the insurance cover delays when importing from China?

Cargo insurance can cover freight charges for non-delivery of your products.

This will provide you the financial security if the goods are not being delivered, or if the freight contract is not completed by the freight company after being paid.

In case of a shipping delay, this insurance is not applying.

However, there are special policies which can cover delays.

Contact your insurance company and ask them about such insurance contracts.

Why do I need a shipping delay complaint letter?

Complaint letter might be needed if you want to pursue your shipping company for the delay.

Not all suppliers and companies will contact you and apologize for the shipping delay.

Sometimes, you have to start the refund process by yourself, and that is why you need a complaint letter.

In practice, it is a document in which the buyer states the deadlines and how they were not met by the shipper.

You can find the rough example of such letter visiting this page.

What Tj chinafreight can make to help me avoid late delivery?

We work with reliable shippers only so we can provide you with high guarantees when it comes to the absence of shipping delays.

Please, contact our customers’ service if you want to see us in your team of pure success.